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Monday morning round-up

Headlines from the national business pages over the weekend:

Defence decline predicted

Britain’s £35bn defence industry could shrink by up to 70% if the next Government continues to cut research and equipment spending and fails to back defence exports.

Speaking to The Sunday Telegraph ahead of the launch of the defence industry’s manifesto for the upcoming election, Ian Godden, chairman of industry body ADS, warned the UK’s 10% share of the global defence market could slip by two-thirds to around 3%, the same share the country has in the world’s car industry and the chemicals sector.

Post-election share sale plot

Advisers to the Government are reportedly working on a secret plan that could allow the state to start cutting its shareholdings in British banks just weeks after the general election.

According to newspaper reports yesterday, the plot would see the Treasury create “convertible gilts” — government bonds that could be exchanged for shares in the banks once certain price targets are met.

Speculation of a government sale of bank shares has been mounting recently after strong rises in the share prices of Royal Bank of Scotland and Lloyds Banking Group.

Russian empire to invade UK

Russia’s state-owned gas firm Gazprom is preparing an audacious bid to become one of the biggest fuel suppliers in Britain, according to reports.

The company is expected to lodge an offer this week for a network of 800 petrol stations and the Lindsey oil refinery at Killingholme, Lincolnshire.

The assets have been put up for sale by Total, the French oil group. It has hired JP Morgan, the investment bank, to sell its UK business, which employs 5,000 people. The business is expected to fetch more than £1bn.

FSA launches investigation

The Financial Services Authority is reportedly looking into the alleged abuse of “restricted lists” as part of its probe into a City insider dealing ring.

Seven people were arrested last week. The FSA is examining suspicious trading in the shares of 15 firms. All of these companies are understood to have been on institutions’ “restricted lists” — a line-up of stocks that employees at a bank or fund manager are not allowed to trade.

The stocks become “restricted” because traders at that firm have received secret information about the company for legitimate professional reasons. The information could relate to a potential fundraising or takeover.

Waitrose to bite into sandwich market

High-end supermarket chain Waitrose is in talks to acquire Eat sandwich bar and coffee chain as part of its expansion plans.

The retailer is said to be in exclusive negotiations to buy the company, which has 100 branches, from the founders, Niall and Faith MacArthur.

The couple could make a fortune; it is understood they own about 45% of the shares and the sale price will be about £100m.

Virgin on a better deal

Virgin Atlantic is expected to demand that competitor airlines are given “greater compensation” following the deal to allow an alliance between British Airways and American Airlines.

In its official response to the American Department of Transportation (DoT) decision to allow the tie-up, Virgin will say that the giving up of just four lucrative slot pairs at Heathrow is not sufficient.

This was posted in Bdaily's Members' News section by Ruth Mitchell .