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BUSINESS
BUSINESS
WITH
WITH
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PERSONAL-
VERDICT ON
BRITAIN’S GOT TALENT THE SAVOY
WE TALK TO ODGERS BERNDTSON’S BUTLER SERVICE
MIXED WITH ALL
RICHARD BOGGIS-ROLFE P20 MOD CONS P26
Issue 1,316 Monday 7 February 2011 www.cityam.com FREE

SANOFI $20BN
GENZYME BID
NEARS FINALE
PHARMA Sanofi’s annual results on Wednesday. Genzyme turning to Credit Suisse and
▲

BY ELIZABETH FOURNIER Analysts say the CVR is a sensible Goldman Sachs.

EXECUTIVES at Sanofi-Aventis and
Genzyme were last closing in on a
takeover deal worth nearly $20bn
(£12.4bn), ending months of specula-
tion surrounding a potential agree-
way to offset doubts over Genzyme’s
future performance, despite the US
company projecting peak annual sales
of $3.5bn.
“They are not paying upfront for a
lot of uncertainty – that’s important,”
Sanofi’s acquisition of Genzyme,
which specialises in developing so-
called orphan drugs for rare diseases,
comes at a time when the pharmaceu-
tical industry as a whole is being Protesters gathered in smaller numbers in Cairo yesterday Picture: REUTERS
forced to diversify to remain relevant.

Egypt regime starts

ment. said Helvea analyst Karl-Heinz Koch. The French pharmaceutical giant
Under the slated agreement, Sanofi “At $74 plus a CVR, the deal terms relies on its pipeline of prescription
is expected to pay around $74 per would be within reason...The earnings and over-the-counter drugs, which are
share for the US biotech company, leverage to Sanofi is substantial.” dependent on patents to avoid compe-

talks with opposition

valuing it at $19.2bn. The figure is a
five-cent-per-share increase on the
approach made by Sanofi chief Chris
Viehbacher in August last year, which
was rejected outright by Genzyme boss
Henri Termeer.
The merger talk surrounding
Genzyme has boosted the company’s
share price in recent months, with its
stock closing at $73.40 on Friday, a 47
per cent increase on July last year,
when its share price struggled to top
tition from generics.
But rights on its blood-clotting duo
Plavix and Lovenox will expire in 2012,
with rival Teva announcing in late
January that the US Food and Drug
Administration is poised to approve its
WORLD
▲

The deal would also incorporate a
contingent value right (CVR), which
could add a tradable value of up to $5
to $6 a share for the acquired share-
holders, dependent on the perform-
ance of Genzyme’s experimental new
multiple sclerosis drug Lemtrada.
Though sources close to the deal
said that the terms of the takeover had
already been agreed, a final announce-
ment could be delayed until later this
week, but is likely to come ahead of
$50.
While Sanofi’s initial $18.5bn pro-
posal was deemed “opportunistic” by
Termeer, the last couple of weeks have
seen intensive two-way discussions
between the companies’ boards, with
the revised bid running slightly above
Genzyme’s market cap and the CVR
adding value for its shareholders.
Sanofi sought advice during negoti-
ations from JP Morgan, Evercore
Partners and Morgan Stanley, with
Lovenox generic.
The UK pharmaceutical industry
also took a hit last week when Pfizer
confirmed plans to shift its R&D oper-
ations to the US after more than 50
years. Chief executive Ian Read sig-
nalled this was part of a “fundamental
change in culture” as the company
moves to offset losses expected when
its blockbuster cholesterol pill Lipitor
faces generic competition for the first
time in June. ANALYSIS: P16
BY STEVE DINNEEN
PROTESTS in Egypt began to cool off
for the first time in almost two weeks
yesterday. Talks between embattled
incumbent President Hosni Mubarak
and the officially banned opposition
finally commenced, sparking hopes
that markets in the region will recov-
er.
However, the Muslim Brotherhood
rejected initial concessions offered by
Mubarak as “insufficient”.
The Egyptian stock market
remained closed yesterday but some
bank branches were opened for the
first time in a week. Queues quickly
formed and staff were told to limit
amounts customers could withdraw.
The government flew in around
£530m in Egyptian pounds to help
deal with the expected glut of with-
drawals.

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29/11/10 till 02/01/11 is 98,444

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 2 News
Yes, Minister: when reality is like TV
EDITOR’S LETTER
ALLISTER HEATH
SOMETIMES, fiction is the best guide
to reality. I have been rewatching Sir
Anthony Jay and Jonathan Lynn’s bril-
liant Yes, Minister, one of Britain’s best-
ever and much-loved sitcoms. It depicts
the warped relationship between a
wannabe reforming politician and his
civil servants, who spend all their time
thwarting him and gradually turn
him into a pathetic creature of the
establishment. This is truly great tele-
vision with a revolutionary edge.
Yet what is astonishing is that while
the sitcom – and its successor Yes,
Prime Minister – ran between 1980
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Deputy Editor David Hellier
News Editor David Crow
Night Editor Katie Hope
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Beam Reach 5 Business Park,
Marsh Way, Rainham, Essex, RM13 8RS
WHAT THE OTHER PAPERS SAY THIS MORNING
GOLDMAN CASH STAGNATES AS ASSET
PRICES RISE
Goldman Sachs’ attempt to spend
some of its $170bn (£106bn) excess
capital on loans, real estate and other
distressed assets is being hampered
by a prolonged rebound in risk
appetite that has lifted prices on
many would-be bargains. Goldman’s
“excess liquidity”, or cash deposits
and securities the bank could sell or
pledge, has helped lift capital ratios
since the financial crisis while weigh-
ing down its returns. Undaunted,
Goldman executives have said they
would continue to prioritise these
deals above accelerating stock buy-
back plans or raising dividends.
DELAYS HIT NISSAN’S ELECTRIC LEAF
CAR IN US
Nissan has admitted to delays in
delivering its new Leaf model to cus-
tomers in the US, the biggest market
and 1988, the themes, phrases and
issues remain incredibly contempo-
rary. The episode on education reform
is unbelievably relevant. History is
repeating itself; the coalition has
learnt nothing from the failures of pre-
vious governments. But it is not all as it
was in the 1980s. The series’ fictional
permanent secretary, Sir Humphrey
Appleby, was a brilliant man. The fact
that Appleby spent all of his time sabo-
taging reform, openness and his minis-
ter Jim Hacker’s political goals –
Appleby is the real boss, with Hacker
tolerated as a passing nuisance – didn’t
detract from his competence. The
problem was one of incentives –
bureaucratic empire building was the
primary objective, not improving the
country – not ability.
While the incentive mismatch
remains a lethal issue today, an added
tragedy is that the quality of the civil
service has also deteriorated, as testi-
fied by the fact that so much govern-
ment legislation is riddled with errors,
internal inconsistencies and other
Super-rich
visas relaxed
POLITICS
▲
BY STEVE DINNEEN
IMMIGRATION laws for the richest
foreigners will be relaxed as part of
plans to encourage more investment
in the UK.
New rules would effectively fast-
track the biggest spenders to perma-
nent residency, with anyone
spending more than £10m qualifying
in just two years, compared to the
minimum of five years it would cur-
rently take. Investors ploughing in
£5m would qualify in three years,
while those spending £1m would
take five years.
Once made residents of the UK,
investors would be free to withdraw
their investment.
The amount of time those seeking
residency have to remain in the coun-
try will also be cut from nine months
for the heavily hyped electric car.
Although more than 20,000 people
have joined a waiting list for the car,
the Japanese carmaker delivered 19 to
customers in December, when pro-
duction began, and 87 last month.
OWEN-JONES ENDS ERA AS L’OREAL
CHAIRMAN
Lindsay Owen-Jones, the British exec-
utive who transformed France’s
L’Oreal from a shampoo and soaps
group to global cosmetics champion,
is stepping down as chairman, leav-
ing chief executive Jean-Paul Agon to
take the leadership.
TOSHIBA UPBEAT ON NUCLEAR DEAL
Toshiba, the Japanese electronics and
engineering group, says it is confi-
dent that it will seal a deal to build a
nuclear power plant on Turkey’s
Black Seat coast, after talks between
the Turkish governbment and south
Korean reactor builders broke down
last year. A deal now hinges on long-
term risk insurance from Japan.
problems. The bureaucracy has lost
much of its competence. The “Rolls-
Royce” (yet deeply flawed) civil service
of yore no longer exists. The situation
is even worse in quangos; the biggest
problem is a lack of managerial ability
among senior people. Few of those in
positions of power have real, private
sector operational knowledge.
Many intelligent, altruistic and prin-
cipled people work for the state. But
the average competence of civil ser-
vants is in decline. Our antiquated and
over-centralised system of administra-
tion remains outstanding only in one
respect: it is not corrupt. But other
than that, it now resembles a cross
between Yes, Minister and the Thick of
It, a modern-day, coarser and horribly
plausible satire developed by Armando
Iannucci, where the political-spin-doc-
tor-civil service establishment is hilari-
ously depicted as idiotic, gutless,
incompetent and power-hungry.
One problem is that so much power
has been transferred to the European
Union. The last thing clever graduates
to just six months.
Businesses will also find it easier to
bring in staff on entrepreneur visas,
with the new rules allowing business-
es to bring in an extra overseas
employee for every additional
£50,000 of investment.
The changes are part of a wider
move to overhaul immigration rules,
with the number of skilled non-EU
workers businesses can bring in being
slashed by a fifth. However, “high-net
worth” individuals will be exempt
from the cap. The proposals are yet to
be endorsed by parliament.
Home secretary
Theresa May has
proposed a host of
changes to UK
immigration laws
INSURERS BALK AT SOARING LEVY FOR
“LIFEBOAT” SCHEME
A compensation scheme for investors
in financial businesses is facing fresh
criticism after insurance brokers
complained that their annual levy
had risen by about 50 per cent. The
Financial Services Compensation
Scheme, set up a decade ago to cover
customers’ losses when a financial
institution collapsed, has faced a
surge of claims relating to missold
payment protection insurance.
BANKS FACE THREAT OF HEAVY LOSSES
FROM RISKY LOANS
Commercial property owners and
developers are in breach of covenants
on four out of every five loans, with
£194bn at risk, according to an
unpublished report for the Bank of
England. Lenders with £243bn out-
standing to commercial property
companies are still heavily exposed.
want to spend their time doing is to
become implementers of somebody
else’s legislation. Another force halting
reform is that government decisions
are now all constantly subject to litiga-
tion and judicial review. Civil servants
routinely take lawyers into meetings
with ministers; their first reaction to
any proposed change is that it is ille-
gal. Often, this has to do with
European legislation or human rights.
There is also a fresh dimension: the
Labour-imposed requirement to per-
form Equality Impact Assessments on
all policies, with any deemed to dis-
criminate against a “disadvantaged”
group automatically open to legal
action. These EIAs will shortly become
even more powerful. They are a com-
plete disaster and have given officials
as well as pressure groups carte
blanche to kill off all change – includ-
ing the entirety of the austerity pro-
gramme. Unless the coalition acts fast,
it will be soon be overwhelmed.
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
Eric Pickles wants councils to cut middle managers instead of services
Big council earners named
LOCAL GOVERNMENT
▲
BY JENNY FORSYTH
UP to 15,000 council workers earning
more than £58,000 a year are set to be
named under government plans to
cut out spending waste.
Local government secretary Eric
Pickles is set to order councils to pub-
lish lists of their highest paid staff
and what they do.
The move is aimed at forcing
authorities to justify the spending
and make them focus on cutting mid-
INVESCO’S NEIL WOODFORD SELLS
MORE UTILITY COMPANY SHARES
Britain’s biggest utility investor has
dumped his £250m stake in
Northumbrian Water, bringing his
total recent disposals in the “over-reg-
ulated” water sector to almost £700m.
Neil Woodford, the manager of
Invesco Perpetual, had already sold
sizeable stakes in Severn Trent and
United Utilities, complaining that reg-
ulations mean investors cannot make
adequate returns. This means that he
has only retained his 12 per cent hold-
ing in Pennon, which has a thriving
waste business as well as owning
South West Water.
KROLL BOND RATINGS BUSINESS TO
EXPAND INTO EUROPE
Jules Kroll's new American bond rat-
ings business is investigating opportu-
nities in Europe and Asia in a bid to
become a global rating agency.
CITYA.M. 7 FEBRUARY 2011
NEWS | IN BRIEF
Nikkei opens at nine-month high
Japan’s Nikkei opened up 0.9 per cent to
a nine-month high this morning, on con-
fidence over the improving jobs picture
in the US, a weaker yen against the dol-
lar and corporate earnings beating esti-
mates. The benchmark pierced this
year’s intraday high of 10,620.57 and
traders said the psychologically impor-
tant 11,000 barrier was now in focus.
Britain in bid to win top EU jobs
The Foreign Office will today launch a
new scheme designed to encourage the
UK’s top graduates to apply for jobs in
the EU civil service, over fears that
Britain has little influence in Europe.
Minister for Europe David Lidington
said: “This campaign aims to increase
the number of UK graduates applying
for the next round of the EU Civil
Service's recruitment competition.”
The UK only makes up six per cent of
the EU's workforce despite representing
12 per cent of the EU's population. The
development comes after Anthony
Browne, Boris Johnson’s policy adviser,
used his City A.M. column to call on the
government to “flood” Brussels with
British staff.
Picture: PA
dle management payments rather
than frontline services.
Local authorities have in turn
warned the list could prompt attacks.
Official figures show council
spending has risen more than 20 per
cent in the last three years to over
£2.4bn.
Some authorities have threatened
to increase charges or cut services
such as libraries, social services and
road mending when steep central
government funding cuts comes into
effect in April.
NOKIA CEO CONSIDERS BIG SHAKE-UP
Several senior Nokia officials serving
on the company's group executive
board are expected to leave soon as
part of a major shake-up being con-
sidered by the Finnish phone giant’s
new chief executive, according to a
person familiar with the situation.
Although Nokia remains the world’s
largest mobile-phone maker, the com-
pany has lost market share in the
lucrative market for smartphones,
the industry’s sales and profit driver,
to Apple’s iPhone and smartphones
that run Google’s Android software.
Exactly who will leave is unclear.
KINDER MORGAN IS LATEST BUYOUT
IPO
The highlight of the US IPO market
this week will be another large pri-
vate-equity-backed offering, this time
from energy company Kinder
Morgan.
CITYA.M. 7 FEBRUARY 2011 News 3

FIAT AND CHRYSLER BOSS REVS UP CONTROVERSY

FIAT and Chrysler
Nasdaq to open as
normal after hack
boss Sergio
Marchionne caused
a storm by saying
he could move the
firm’s headquar-
ters from Turin to
the US. He also
said bail-out loans vides online information for corpo-

▲
FINANCIAL SERVICES
from the US car- BY ELIZABETH FOURNIER
ried “shyster rates.”
He later said he TRADING on the Nasdaq OMX
regretted the com- exchange is expected to go ahead as
ment. normal this morning, after suspi-
cious files were found on its servers
Picture: PA over the weekend following a hacking
enquiry.
Nasdaq said yesterday that mali-
cious software had been found on its
Directors’ Desk interface, which pro-
rate officers.
But the exchange operator said
that there was no evidence the hack-
ers accessed or acquired customer
information, or that any of the main
group’s trading platforms had been
compromised.
Nasdaq did not say when the inves-
tigation, carried out by the FBI and
forensic firms, was launched, or
when the suspicious files were found.

Berggruen to
float cash “BE SIMPLER THAN
WHAT COULD

shell on LSE
”
acting as advisers.
▲

INVESTMENT
BY STEVE DINNEEN
THE “homeless billionaire” Nicolas
Berggruen is to float a cash shell on
the London Stock Exchange.
He will seek £700m from investors
for his Justice investment vehicle,
which he plans to use to make an
acquisition worth between £1bn and
£5bn.
It is understood Lord Myners, who
was appointed City minister in 2008
under the Labour government, has
been approached to chair the fund.
He was unavailable for comment last
night.
Justice is not Berggruen’s only cash
shell but is the first that will be float-
ed in the UK.
In the past he has used cash shells
to invest £520m in zombie life assur-
ance fund Pearl in 2009, through a
vehicle called Liberty Acquisitions,
and $1bn in hedge fund GLG
Partners, through his Freedom
Acquisitions fund.
Cash shells are companies that con-
sists solely or largely of a lump sum of
cash in the bank, with few or no tan-
gible assets.
Citigroup and Barclays Capital are
It is understood Nouriel Roubini –
the economist who shot to fame as
the Dr Doom who predicted the eco-
SPREADS?
nomic crisis – has been approached to
join the board of the vehicle, along
with Bill Ackman, the Pershing
Square Capital Management boss.
Berggruen is founder and presi-
dent of Berggruen Holdings. He also
NOTHING.
heads up the Nicolas Berggruen
Institute think tank.
The son of a famous art collector,
he was born in Paris and educated in
Switzerland but is a German-US
national.
He achieved notoriety when he sold
almost all of his possessions – bar his
art collection and a private jet – opt-
ing instead to live out of hotels.
He is involved in a number of artis-
tic ventures, including sitting on the
International Council for the Tate
Museum.
Nicolas Berggruen
shot to fame after
selling almost all of his
possessions and living
out of hotels

Lagarde: rescue ABI warns on

fund sufficient bonus payouts
▲

EUROPE
FRENCH economy Minister Christine
Lagarde said yesterday that the
Eurozone’s package of rescue funds
were enough to face off future crises.
France and Germany want
Eurozone leaders to sign off on a “com-
prehensive package” aimed at halting
the bloc’s year-long debt crisis, includ-
ing changes to the European Financial
Stability Facility (EFSF), the €440bn
bailout fund agreed to last May.
“We have enough punch to respond
in case of emergency, which is suffi-
cient if we develop it, and if we ensure
that it can all be mobilised,” Lagarde
said.
REGULATION
THE Association of British Insurers
(ABI) has warned the UK’s top 350
public firms against offering execu-
tive pay deals with unlimited bonus-
es.
An ABI letter sent to all FTSE 350
firms warns that its institutional
voting information service (IVIS)
would issue a “red top” alert on
uncapped pay deals where there was
no proof of exceptional circum-
stances.
Shareholders have become
increasingly alarmed by new con-
tracts, which appear to have no limit
on bonuses, the ABI said.
 4 News CITYA.M. 7 FEBRUARY 2011

Report: emerging economies

crucial for British exporters
Russia, India, China) is set to increase next decade will be far higher in
▲

WORLD ECONOMY
BY JULIAN HARRIS
EXPORTS from the UK will rebound
over the next decade, driven by a
boom in goods and services going to
emerging markets, a leading group of
economists said today.
Overall exports will rise by 8.5 per
cent a year, according to forecasters at
the Ernst and Young Item Club.
The total value of UK goods and
services into “BRIC” countries (Brazil,
by 11.7 per cent a year to 2020.
British exports to BRIC countries
increased by an average of 20.6 per
cent a year between 2004 and 2008.
The recession resulted in a major
slowdown, as export growth to BRICs
dropped to 2.2 per cent (2008--2010),
and still lag behind peer countries
such as Germany and the US.
But the global recovery is expected
to reignite exports to booming BRICs.
Annual economic growth over the
China (8.5 per cent), India (7.9 per
cent), Brazil (4.2 per cent) and Russia
(four per cent) than in Western areas
such as the Eurozone (1.8 per cent).
Exports of British financial services,
mainly from the City, will increase by
almost 10 per cent a year, the report
said. Item economist Andrew
Goodwin said the government should
attempt to “break down regulatory
barriers for companies that wish to
break into those countries.”

A UK export, Rolls Royce, flys the flag for Britain at a Macau casino Picture:REUTERS

ANALYSIS l Share of exports going to BRIC countries

25
% of
21
exports
20

15
11 11
10
6
5 5
5

0
France UK Italy Germany US Japan

Market tense
over rate rise
to that by keeping domestically gen-
▲

UK ECONOMY
BY JULIAN HARRIS
MARKETS are nervously awaiting the
results of the Bank of England’s latest
meeting on interest rates.
“We expect a considerable degree
of market tension ahead of
Thursday’s monetary policy commit-
tee (MPC) announcement,” said
Investec’s Philip Shaw.
Sterling rose last week after MPC
members Andrew Sentance and
Charles Bean gave interviews which
suggested a leaning towards mone-
tary tightening.
Bean noted global commodity
price inflation, admitting that the
committee “may well have to respond
erated inflation lower.”
Consumer price inflation reached
3.7 per cent in December, and
Andrew Sentance’s call for a modest
rate rise was finally joined by another
MPC voter last month. Martin Weale
also voted for a 0.25 per cent increase.
Yet Shaw expects rates to remain at
their historical low. A rate hike “could
have the ‘avoid at all costs effect’ of
derailing the planned fiscal consoli-
dation,” he said.
And the British Chambers of
Commerce yesterday called for the
Bank to keep rates on hold. “Avoiding
a new setback must remain a key pol-
icy priority,” commented BCC econo-
mist David Kern.

ECONOMISTS’ VIEWS: WILL THE BANK RAISE

INTEREST RATES THIS WEEK? Interviews by Julian Harris
PHILIP SHAW | INVESTEC

“ A rate rise is possible, but unlikely. For rates to rise, the two existing

”
‘hawks’ would need to be joined by Tucker, Dale and Miles. This is possible, but it
seems more likely that the Bank rate will remain at 0.5 per cent this time.

GEOFFREY WOOD | CASS BUSINESS SCHOOL

“ The MPC should have raised interest rates a long time ago, but inflation

”
has become far too high and vulnerable to price shocks. A modest increase would
tackle inflation expectations. The Bank’s credibility is seriously at risk.

HOWARD ARCHER | IHS GLOBAL INSIGHT

“ The odds still significantly favour the Bank holding fire on interest rates

”
in the very near term. Nevertheless, it is far from inconceivable that they could
raise interest rates at the February meeting this Thursday.
 Economics 5

CBI: small factory jobs

growth hits 15-year peak
cent of surveyed manufacturers said

▲
UK ECONOMY
DOMESTIC demand for British pro-
duced goods picked up in the three
months to January, boosting produc-
tion for small manufacturers, a
Confederation for British Industry
(CBI) survey showed today.
And small and medium sized man-
ufacturing companies are increasing-
TRADE IN... ly optimistic about export prospects
for the year ahead.
While the growth in domestic
orders remained modest, it accelerat-
ed at the fastest rate since January
1997, the CBI said.
And a positive balance of 10 per
they had increased employment --
the sharpest rate of growth since
April 1995.
“Manufacturing is one of the few
bright spots in the economy,” said
the CBI’s Lucy Armstrong.
However, inflationary pressures
are squeezing the UK’s factories.
A positive balance of 28 per cent of
respondents reported an increase in
average unit costs, while a balance of ...MORE CORNERS...
+31 per cent expect costs to further
increase in the next quarter.
And manufacturers “are being
forced to pass these costs onto cus-
tomers,” Armstrong said.

IoD: cut taxes

IoD: 10 IDEAS FOR GROWTH
1. Reform employment law:
Employing people must be cheap-
er, especially for small and medi-
um sized businesses.

and red tape 2. Encourage deregulation:

Whitehall must incentivise civil
servants to cut regulation.
3. Choice in public services:
“Radical” reform of the public
invest for the most entrepreneurial sector through market forces.
▲

UK ECONOMY
BY JULIAN HARRIS
TWO dozen policy changes to
encourage growth could be made by
the government at no extra cost to
taxpayers, the Institute of Directors
Shoppers sought out bargains despite the VAT hike Picture: Micha Theiner/City A.M recommended today.
The proposed reforms fall under
in our society,” the IoD said.
The tax also deters wealthy,
mobile individuals from locating in
the UK. “We do not want to see the
UK marked out as a high tax coun-
try,” the report stated.
Small businesses and new start-
ups must face fewer barriers to
4. Spend on infrastructure:
Any profits from resale of the
government’s banking shares to
pay for infrastructure.
5. End planning restrictions:
Release land for development.

Boost for January’s sales

10 main areas for the coalition to
focus on, the IoD said.
The inherent tendency of govern-
ments to over-regulate requires a
“game changer” in civil service pay
RETAIL
▲
trade, such as red tape, the IoD
argued.
The report calls for a freeze in cap-
6. Localism: End national public
ital gains tax for new business and
sector collective pay bargaining.
an annual investment allowance of
7. Tax incentives: Scrap the 50p

BY JULIAN HARRIS
DOOM and gloom forecasts for the
British high street have yet to materi-
alise, according the latest BDO sales
tracker, released today.
In January, sales for retailers with
revenues between £5m and £500m
were up 9.1 per cent compared to the
same time last year, said BDO.
Consumers have been taking
advantage of “VAT busting” offers that
some retailers used to tempt shoppers
after VAT increased to 20 per cent on 4
January.And online sales were up an
astonishing 49 per cent – a rate of
growth not seen in nearly a year. “This
year has had a healthy start,” said
BDO’s Don Williams.
However, the figures may have been
helped by a milder month than the
snow-affected January of 2010.
And the findings are out of kilter
with recent John Lewis figures, which
showed a 0.9 per cent fall in the week
to 29 January, and 2.2 per cent drop
the previous week.
and promotion structures, it said.
“Only when the bureaucracy is
given the incentive to slim down will
it do so,” the report said. “The record
of deregulation by governments of
all persuasions is poor.”
And tax reforms could be made
without endangering fiscal consoli-
dation, the IoD said.
The 50p top rate of income tax
“will raise little or no extra revenue.”
The top band, which is supposed to
be a temporary measure, “reduces
the incentive to work, save and
up to £25,000 a year.
The group has also called for a
relaxation of restrictions on build-
ing on the green belt. As well as
boosting the economy, “greater land
release could also lead to lower land
and house prices and greater afford-
ability,” they said.
“The government’s deficit reduc-
tion strategy is central to improving
growth prospects,” said the IoD’s
Miles Templeman, “but it also needs
to reform the supply-side of the econ-
omy to boost the private sector.”
tax rate, the IoD says.
8. Competitive energy policy:
Clarify energy policy and scrap
changes to air passenger duty.
9. Corporation Tax Reform:
Reduce the tax to 20 per cent.
10. Fiscal tightening: Cut public
spending to GDP ratio to 35 per
cent by 2020.

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Multiples paid by trade buyers for
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And for private equity buyers, the
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“Throughout 2010 we saw that the
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 6 News CITYA.M. 7 FEBRUARY 2011

US bonus rules promise to be HSBC BOSS COULD GET £9M PAYOUT

less strict than EU regulation

three years, with no more than 20 per schemes for other workers in roles
▲

BANKING
BY JULIET SAMUEL
REGULATORS in the US are today
expected to unveil a set of less restric-
tive bonus regulations than those
adopted by the EU in December.
Although the Federal Deposit
Insurance Corp (FDIC) is thought to be
planning a similar set of headline
rules, the details will be less prescrip-
tive. The FDIC is expected to 50 per
cent of the total bonus is deferred over
cent in cash up front.
But the US authorities’ rules are
likely to be much less wide-ranging
than those imposed by the EU and
implemented by the UK’s FSA.
The FSA has chosen to apply EU
rules to 2,500 financial firms in the
UK, whereas the US rules are likely to
apply only to top executives at firms
with over $50bn (£31bn) in assets. The
firms’ management will then be
responsible for creating incentive
that pose “material risk” to the finan-
cial system. The US rules are also
unlikely to demand that firms include
a “clawback” clause in contracts to
retrieve money paid in bonuses.
A key question is whether the FDIC
will adopt the same provision as in the
UK that the rules apply to all the for-
eign subsidiaries of any London-based
firm, which has prompted concerns
that UK banks could find it difficult to
compete for staff in Asia.

TRADE Whatever, Wherever, Whenever

HSBC yesterday insisted that its remuneration committee had not yet met to discuss the
pay packet of its chief executive, as speculation mounted that Stuart Gulliver was in line
for a bonus of around £9m. Yesterday, sources close to the bank pointed out that HSBC
makes 90 per cent of its profits outside of the UK. Picture: GETTY

Time running
out for Merlin
Instead, Huhne said the govern-
▲

BANKING
BY JULIET SAMUEL
THE Treasury is anxious to get banks
to agree to an industry-wide lending
commitment under “Project Merlin”
before earnings season starts.
But time is running out for the ini-
tiative to improve the industry’s
image. Barclays will kick off the
major UK banks’ full-year results sea-
son next Tuesday, with its new chief
executive Bob Diamond expected to
receive an all-shares bonus to a value
of £10m.
The government is keen to include
some provisions on bank bonuses in
the Merlin plan, although energy sec-
retary Chris Huhne sounded an unex-
pectedly conciliatory note on bonuses
yesterday.
He said: “I am not against, whether
they're footballers or bankers, people
who have particularly high skills and
talents being paid whatever you can
get in the marketplace.”
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UBS to slash its variable pay pot
despite concerns on keeping staff
www.cityindex.co.uk/mobile
▲
ment would ensure that part of any
bonus award was paid in shares,
although this is in fact European leg-
islation that has been in effect since 1
January.
Aside from the bonus issue, the cen-
trepiece of the agreement will be a
promise by banks to increase lending,
with a variable target to be tied to
GDP growth plus inflation. Such a tar-
get would fall far short of the 10 per
cent the Treasury wanted originally.
Project Merlin has been beset by
problems, with banks having to nego-
tiate through Pricewaterhouse-
Coopers to avoid sharing sensitive
data.
Energy minister Chris
Huhne has sounded a
conciliatory note on
bonuses but says some
should be in shares
banks.

BANKING
or search City Index Mobile UBS will pay out less money in bonus-
es for 2010 than in the previous year.
The Swiss bank’s total bonus pool for
Spread betting and CFD trading can result in losses that exceed your initial deposit. its some 65,000 employees will
amount to SFr4.3bn (£2.8bn), com-
UBS declined to comment on the
numbers and said the bank would
provide details about its salary system
when it publishes full-year results
tomorrow.
Analysts expect the bank to post a

        


    
  

 
    pared with SFr4.8bn for 2009. net profit of SFr7.4bn for 2010. It is
   
 

     
      
 
    
 One reason for the lower amount understood that some UBS executives
  
 
 was that UBS raised the fixed part of are concerned that smaller bonuses
employees’ salaries by 10 to 20 per- will be inadequate to retain top talent
cent, in line with practice at other at the Swiss bank.
 The Capitalist
8 CITYA.M. 7 FEBRUARY 2011
EDITED BY
JULIET SAMUEL
GOT A STORY? EMAIL
thecapitalist@cityam.com

EVEN THE BILL OF THE WEEK

GLAMOROUS
NEED A GOOD
AUDIT TRAIL
WHAT, one might ask, do the Oscars have
in common with the government’s ill-fated
Project Merlin – other than a lot of sound
and fury?
“Big four” accountants might know,
because the answer to this missing link
puzzle is PricewaterhouseCoopers. As the
government’s regular box-tickers, the firm
has been recruited to act as a tight-lipped
go-between for banks to thrash out com-
mercially sensitive lending targets.
But meanwhile, in the more glamorous
practice of the business, chief PwC ballot-
leaders Brad Oltmanns and Rick Rosas are
gearing up for the firm’s 77th year as bal-
loting managers for the Oscars.
Their privileged positions means that
they will be the only lucky humans in the
world to know the results of the vote before
Colin Firth takes another one on the chin
for British pride by losing – or scores a tri-
umph for our obsession with royalty by tak-
ing home the treasured prize.
Their colleagues working on Merlin, by
contrast, will be the first to know just how
many millions David Cameron can count-
towards funding of his Big Society bank.
On the latter score, at least, The Capitalist
wouldn’t recommend holding your breath.
PLEASE HOLD THE LINE
Oil & gas nerds everywhere scrambled to
join an impromptu conference call yester-
day as Energees Investments proudly
announced a higher bid for Regal
Petroleum. But in their haste to make the
fact known to all and sundry, Energees
forgot to take the crucial precaution of
muting most of the lines.
It seems that somewhere during a long
explanation of Ukrainian competition
law, they lost the attention of one careless
Reuters hack: the Reuters on-hold music
suddenly started to blare into everyone’s
ears, forcing Smart Holding finance direc-
tor Denis Rudev to continue for the rest of
the call at shouting volume.
It’s all in a day’s takeover, eh?
A COUPLE of fine wine lovers
splashed out at the Hawksmoor
steakhouse after a well-judged
tour of the wine cellars.
Sandra Bullock won Laying eyes on a bottle of 1982
the Oscar for The Petrus at the bargain base-
ment price of £6,500 (usually
Blind Side in 2010
to be found for over £10,000),
they simply had to pop the
cork.
And as they sat back to enjoy
their vintage over platters of
lamb chops and lobster, the
friendly diners picked up
chums on the next door table.
And several drinks later, our
generous wine-lovers were
offering not only to pick up
the tab for their dining neigh-
bours, but invited both them
and the waiter out for a
nightcap. That’s what we’d
call fine dining.

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CITYA.M. 7 FEBRUARY 2011
ANYA WEAVING &
PAUL FRANKFURT
BANK OF AMERICA
MERRILL LYNCH
Bank of America Merrill Lynch, long-
time corporate broker to Regal
Petroleum, is advising during the
bidding war between Energees and
Geo-Alliance/ Heamoor.
Anya Weaving, an associate
director at BAML, and Paul
Frankfurt lead the advisers.
Weaving has plenty of experience
in M&A battles, having advised
KNOC during its tumultuous £1.9bn
takeover of Dana Petroleum, which
concluded at the start of the year.
Paul Frankfurt acted as corporate
broker for Flybe when it floated on
the London Stock Exchange in
December to value the firm at
£215m.
On the Energees Management
side, UBS is acting as financial
adviser and broker. Thomas Onions
and Alison Harding-Jones, both
directors of mergers and acquisi-
tions, are leading the team.
Harding-Jones helped Poland sell
shares worth £796m in utility firm
Tauron last year, while Onions
counts recent takeover target
DataCash among his clients.
NEWS | IN BRIEF
Hayward may join Abu Dhabi firm Time Warner considers IPC sale
Former BP chief executive Tony
Hayward has been approached to launch
a new oil firm backed by an Abu Dhabi
sovereign wealth fund, it is understood.
Hayward is understood to be in the early
stages of considering an offer from
Mubadala, a fund aimed at diversifying
Abu Dhabi’s economy. Hayward and
Mubadala could not be reached for com-
ment yesterday.
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News 9
Regal backs
Energees bid
ENERGY future flotations in the UK.
▲
BY MARION DAKERS “Our Ukraine business Metinvest
will be [floated] at some point and the
UKRAINIAN investment vehicle sooner we build a reputation in the
Energees Management raised its offer public market the better,” said Denis
for Regal Petroleum from 24p to 38p Rudov, Smart’s chief financial officer.
per share yesterday, in the latest volley “Our aim is not just Regal – we aim
between bidders for the London-listed to build the biggest oil and gas partici-
oil explorer. pant in Ukraine, and we want to give
The Regal board has backed the the opportunity to the public market
£85m bid for up to 70 per cent of the to participate in this growth.”
firm’s share capital. Hadron Capital Regal will remain listed on AIM,
and Renaissance Securities, who own with shares set to resume trading this
13 per cent of Regal shares, have week. Shareholders have until 18
already given irrevocable undertak- February to accept Energees’ offer.
ings on this offer. Regal’s colourful founder Frank
Geo-Alliance and Heamoor, both Timis now holds less than a three per
controlled by Ukrainian investor cent stake in the firm, Energees said
Victor Pinchuk, have until Friday to yesterday, having sold his stake before
improve their informal bid of 25p per any offer was announced.
share that was first mooted in Heamoor and Geo-Alliance were
December. not available for comment yesterday.
Smart Holding, the owner of Regal shares closed at 31.25p on 17
Energees Management, said yesterday January, the day before they were sus-
the takeover of up to 70 per cent of pended in accordance with AIM
Regal’s chairman Keith Henry (inset) has backed Energees’ improved offer Regal would be good preparation for takeover rules.
US entertainment giant Time Warner is
considering a sale of IPC media, the
publishing house behind NME, Marie
Claire and Nuts magazine. The company
has sparked a strategic review of the
magazine publishing unit, in a move
which could lead to title disposals
across the IPC stable. Time Warner
acquired IPC Media from Cinven in
2001 for £1.15bn.
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8 FEBRUARY
CITYA.M. 7 FEBRUARY 2011 Politics 11

Cameron rules out

George Osborne
proposed a £25,000
levy on all non-
doms while in
opposition

tax cuts in Budget

Picture:
Micha Theiner
/City A.M.

make significant net tax cuts. It just

▲
POLITICS
BY DAVID CROW
DAVID Cameron yesterday ruled out
“significant” tax cuts for individuals,
insisting the parlous public finances
made Budget giveaways impossible.
The Prime Minister said: “I would
love to see tax reductions. I’m a tax
cutting Tory and I believe in tax cuts,
but when you’re borrowing 11 per
cent of your GDP, it’s not possible to
doesn’t add up.
“It’s no good saying we’re going to
deal with the deficit by cutting
spending, but then we’re going to
make things worse again by cutting
taxes.”
Cameron, speaking in a Sunday
Telegraph interview, said the govern-
ment was still committed to lifting
the poorest out of tax altogether by
changing income tax thresholds.

Government
eyes new levy
on non-doms
rather than economically motivated.
▲

POLITICS
BY DAVID CROW
THE government is considering plans
for a fresh crackdown on non-doms,
which could see the existing levy
extended at the Budget in March.
In April 2008, the Labour govern-
ment introduced a £30,000 annual
charge for non-doms who had been
living in the UK for seven years or
more.
Non doms are people resident in
One Treasury insider yesterday
admitted there were concerns that a
higher levy or one that hit more non-
doms could dent Britain’s competi-
tiveness by causing an exodus of
big-spending millionaires.
Official statistics show that the
number of people registered as non-
doms in the UK fell for the first time
in five years in 2008-09 as the rich
fled higher taxes and the credit
crunch.




 


the UK but not domiciled here, allow-
ing them to avoid paying UK tax on
their foreign earnings, although they
do pay UK tax on UK earnings.
Treasury sources yesterday con-
firmed one option under considera-
tion is extending the levy to include
non-doms who have been in the UK
for less than seven years.
In opposition, chancellor George
Osborne proposed a levy of £25,000
on all non-doms regardless of how
long they had been UK resident.
However, City A.M. understands the
chancellor is mindful of the fact that
a higher or more widely applied levy
would not raise a significant amount
of revenue, suggesting any change in
the regime would be politically
Herbert: Labour Coalition plans
wrong on police marriage fund
▲
POLITICS
THE GOVERNMENT yesterday defend-
ed its spending plans after shadow
home secretary Yvette Cooper
accused it of “taking risks” with
crime.
Policing minister Nick Herbert said
Labour claims that more than 10,000
jobs could go across police forces in
England and Wales by 2012 were
“totally dishonest”.
Cooper said the figures were based
on announcements by police forces
across the country. But Herbert reject-
ed the figures, saying: “I don’t accept
Labour party figures, I think it’s bet-
ter to accept official figures.”
The data, obtained by a freedom of
information request, show that there
were 139,000 people registered in the
UK as non-doms in 2008-2007, but by
the next year that figure had fallen
by 16,000, or 11.5 per cent.
Experts say that the financial crisis
can only account for a small part of
the fall, with the majority attributa-
ble to the £30,000 annual charge
Critics warned at the time that the
rule changes would lead to an exodus
of highly mobile millionaires which
would cost the UK economy more
than it raised in tax receipts.
The Treasury says that roughly
5,400 people have opted to pay the
£30,000 charge instead of leaving,
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IAIN Duncan Smith, the work and corporate diplomacy and the
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ples to get married and stay together. emerging economies. You will
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unveiled this week as part of a raft of
benefit changes that will see single Apply now. Application period
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closes shortly.
New research show that the cost of
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credits and benefits.
 12 News CITYA.M. 7 FEBRUARY 2011

888 insists talks

Jimmy Choo with Ladbrokes
owner mulls are still on-going

£500m sale
LEISURE

▲
ONLINE bookmaker 888.com will this
morning tell the market that it is still
in talks with Ladbrokes over a possi-
ble merger, after suggestions that dis-
cussions had faltered.
High street bookmaker Ladbrokes
Jimmy Choo in 1996. last month confirmed it was in “very
▲

RETAIL
BY RICHARD PARTINGTON Towerbrook also asked Goldman preliminary” talks with 888 over a
Sachs and Morgan Stanley to exam- merger.
THE OWNERS of luxury fashion ine whether to float Jimmy Choo on Weekend reports suggested the
brand Jimmy Choo are likely to put the stock market, or whether to pair had terminated talks after failing
the firm up for sale, according to keep hold of the company. to agree on price.
people familiar with the situation. If Jimmy Choo were to list, it However, 888.com will say this
The designer shoe-maker, which would be following fellow luxury morning that talks between the two
is majority owned by private equity brand Prada, which last month remain ongoing, when it updates the
house Towerbrook Capital, could announced an offering on the Hong market with its fourth quarter
change hands for as much as Kong stock exchange. results.
£500m. Towerbrook bought a controlling Shares in the online gambling site’s
A sale was first mooted in 83 per cent stake in the brand in owner 888 Holdings have fluctuated
September last year, after 2007 from Lion Capital for £185m. in recent weeks over speculation on
Towerbrook appointed investment Luxury products have enjoyed a whether the deal will be agreed.
bankers Goldman Sachs and return in demand following the
Morgan Stanley to complete a recession. ANALYSIS l 888
“strategic review” of the retailer. It A spokesperson for the private 65
43.75
p 4 Feb
is understood that the review is equity house said last night it was
60
likely to recommend a sale. looking at a “range of options,” with
A deal could net the label’s the outcome of the strategic review 55
co-founder Tamara Mellon, who due this spring.
50
owns a fifth of the fashion group, as KBC Peel Hunt analyst John
much as £100m. Stevenson said 2011 could be a boom 45
Mellon, who received an OBE in year for retail M&A activity.
the Queen’s birthday honours list He said: “There are quite a lot of 40
last year, founded the company sales that could come up this year,
with Malaysian-born shoe-maker it’s becoming a peak time for retail.” Jimmy Choo co-founder Tamara Mellon could pocket £100m Picture: REX 8 Nov 26 Nov 16 Dec 10 Jan 28 Jan

:LQGRZVŠ/LIHZLWKRXW:DOOVŒ7RVKLEDUHFRPPHQGV:LQGRZV

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CITYA.M. 7 FEBRUARY 2011
Chicken magnate Ranjit Singh Boparan is ready to take over Northern Foods
Airlines are
wary over
NATS plan
▲
AVIATION
BY HARRY BANKS
AIRLINES do not want the govern-
ment to reduce its dominant stake in
the country’s air-traffic control sys-
tem below 25 per cent, it is under-
stood.
The government is considering
reducing its 49 per cent stake in the
air-traffic control system NATS as part
of measures to pay off the ballooning
public debt.
But the Airline Group, a consor-
tium of airlines which owns 42 per
cent of NATS, is understood to think
that a reduced government stake
would weaken national influence
over European Union air traffic poli-
cy.
“It would be highly damaging if we
were left on the sidelines to watch
while others, notably France,
Germany and Spain, decided the
future of the air traffic control indus-
try,” Airline Group chairman Peter
Read wrote in a letter to transport sec-
retary Philip Hammond.
The government will decide by the
time of its 23 March budget whether
to sell the stake.
Potential bidders for the stake
include services company Serco, the
owner of London’s Gatwick airport
Global Infrastructure Partners and US
defence company Lockheed Martin.
Airlines which own a stake in
NATS include British Airways, Virgin,
Lufthansa-owned bmi, Monarch
Airlines, Thomas Cook and Tui
Travel.
•Rolls Royce is understood to be
discussing a deal with Qantas that
would see the Australian airline get
free servicing of its engines rather
than cash compensation for last
November’s engine troubles.
The engine maker still expects to
book a £50m-£60m one-off change for
the engine failure that forced Qantas
to ground its Airbus A380 fleet.
Barclays joins £115m Daisy loan syndicate Google wants short probe
▲
TELECOMS
BY MARION DAKERS
BUSINESS telecoms group Daisy has
secured an additional £40m credit
facility to help fund further acquisi-
tions, the firm will announce today.
AIM-listed Daisy has brought in
Barclays as the fourth lender in its
syndicate, which also includes Lloyds
TSB, Yorkshire Bank and HSBC.
Daisy now has access to £115m
through the credit facility.
Chief financial officer Anthony
Riley said in an advance statement
seen by City A.M. : “We are delighted
Barclays has joined our existing bank-
ing syndicate.
“The increased facility provides
funding for further growth and
demonstrates the confidence that the
participating banks have in our abili-
ty to consolidate the fragmented
reseller marketplace.”
Northern Foods sale near
▲
M&A
BY MARION DAKERS
RANJIT BOPARAN is getting ready to
publish more details of his £342m
takeover bid for Northern Foods,
which could be sent to shareholders as
soon as today, sources said yesterday.
Boparan’s bankers at Rothschild
and Goldman Sachs were this week-
end putting the finishing touches on
Daisy has already bought up
SpiriTel for £30m this year, and spent
£23.5m on the entire share capital of
medical telecoms firm NEG MBO Two
in December.
The firm also acquired handset
provider Fone Logistics last summer
for £3.6m in cash.
The firm reported a half-year loss of
£9.8m in December, and chief execu-
tive Matthew Riley has set his sights
on profitability by 2012.
Boparan’s takeover papers, which are
understood to include further details
of the firm’s plans for Northern’s
£142m pensions deficit.
While Boparan has made an agree-
ment with the Northern pension
trustees, the deal has not been made
public.
Greencore, which agreed a nil-pre-
mium merger with Northern in
November before Boparan stepped in
TECHNOLOGY
GOOGLE wants to avoid a lengthy
legal battle with European Union reg-
ulators investigating its market domi-
nance, the Sunday Telegraph quoted
its chief executive as saying.
“We certainly want to avoid that,”
Eric Schmidt told the paper in an
interview. “I think it is in our interests
and I would hope in their interests to
a do a quick analysis of concerns that
News 13
with an all-cash offer, had promised to
pour £15m into Northern’s pension
deficit per year. It is believed that
Boparan will match or better this.
The offer documents will be sent to
Northern shareholders for approval
once the Takeover Panel has given the
green light, which could be as early as
this morning.
Boparan declined to comment,
while Northern was unavailable.
India hopes
Cairn deal
will proceed
▲
OIL & GAS
BY HARRY BANKS
INDIA’S oil secretary said yesterday he
was hopeful of finding a “positive
solution” to Cairn India’s plans to sell
a controlling stake in its Indian unit
to Vedanta Resources.
Oil secretary S. Sunderashan’s
remarks are the strongest sign yet
that the proposed deal, valued at up
to $9.6bn (£5.9bn), could go through
by 15 April, the target date set by both
Cairn and Vedanta to seal the transac-
tion.
The final call on the matter lies
with India’s new oil minister S. Jaipal
Reddy.
Cairn Energy agreed in August to
sell between 40 and 51 per cent in
Cairn India to Vedanta, but the deal
has been delayed on rumblings from
the Indian government and its part-
ner in the big Rajasthan blocks, Oil
and Natural Gas Corp.
“We had constructive discussions
with the representatives of Cairn and
Vedanta. We hope to move forward to
a positive solution,” Sundareshan said
after a meeting of all stakeholders in
the oil blocks in the western
Rajasthan state.
He said the steps were being taken
to expedite the deal but did not give a
specific timeframe.
Separately, Cairn India also termed
yesterday’s meeting with Indian offi-
cials as “constructive,” adding it
hoped to seal the deal by 15 April.
The approval will expedite comple-
tion of the biggest merger and acqui-
sition deal in the Indian oil sector and
could boost investor sentiment about
the business climate in Asia’s third
biggest economy.
State-owned ONGC, which has a 30
per cent stake in the Cairn-operated
Rajasthan fields and pays royalties on
the entire output, has said it would
not block the planned deal but want-
ed the royalty issue to be resolved.
have been raised by competitors,
hopefully they are minor or they are
not correct.
“We’ll find out and make sure we
are operating well within the law and
the spirit of the law.”
Brussels launched a formal investi-
gation into Google in November fol-
lowing complaints from European
rivals that it was abusing its domi-
nant position in the market for web
search services.
 14 News
Rising commodity prices have further to go
CNBC COMMENT
MAITHREYI SEETHARAMAN
F
OR two weeks our headlines and
television sets have been domi-
nated by Egypt. Prior to the scenes
in Tahrir Square, all eyes were on
Tunisia; contagion is spreading across
the Middle East. So what role did ris-
ing food costs play in pushing the
region to the brink? And how can citi-
zens be expected to understand the
“commodity supercycle”?
Onions, a staple in Indian cooking,
are now unaffordable for the country’s
poor, with food inflation at 17.5 per
cent. In China, the number is also in
double digits. According to Capital
Economics, a monthly grocery bill of
$600 for a family of four in Canada is
set to climb to $630 in 2011.
That’s a rise from two to five per
cent food inflation. But in developed
countries, these shifts are rarely
reflected in monetary policy, in part
because food is a small part of overall
baskets or because the narrower meas-
ures used exclude food. Yet last week,
the United Nations’ Food and
Agriculture Organisation reported
that its food price index is at its high-
est in 21 years. The jump in oil prices
only adds to the pressure felt by con-
sumers that have seen global asset
prices surge since mid-2010. To critics,
it’s a sign that the US Federal Reserve’s
monetary easing is sending inflation-
ary shock waves across the globe.
Needless to say, Fed chairman Ben
Bernanke disagrees: he called it
“entirely unfair” to blame the Fed’s
loose monetary policy or QE2 for ris-
ing food prices. He said booming
emerging economies, and the richer
diets that go with rising prosperity,
have driven the price hikes.
So what is the truth, and what else
could be going on? Goldman Sachs
expects “cyclical commodities to enter
a bull market, augmenting the bull
market in agricultural commodities
that began in 2010”. It is long on corn
and soybean, and believes that as the
global economy continues to gather
steam these are just some of the com-
modities where limited supply will see
prices rally. Wholesale sugar prices last
week hit a 30-year record. Wheat is up
77 per cent in the past year and
increases have been seen in soybean,
oats and rice. But prices are still far
below their 2008 record and there’s
plenty of room to go higher.
It’s not just the kinds of commodi-
NEWS | IN BRIEF
Morrisons plans Davies range
Morrisons plans to launch a fashion
range in partnership with designer
George Davies, founder of Next.
Advanced talks between Morrisons and
Davies are expected to conclude this
month, clearing the way for a range to
be launched as early as the autumn.
Davies created rival retailer Asda's suc-
cessful George clothing range.
CITYA.M. 7 FEBRUARY 2011
ties that China and India want which
are going up in price. Crucially,
Goldman argues that QE2 will drive
US growth and that a bidding war will
ensue between developed and develop-
ing worlds when it comes to who
wants to eat the richer diet. So take
that, Bernanke.
Countries will continue to stockpile
food to avoid the scenes of unrest like
those in Tahrir Square. Traders contin-
ue to bank on rising prices. The global
consumer may be left with no choice
now but to hope that western mone-
tary policy somehow re-aligns to
reflect a world that is more intricately
connected than ever before.
Maithreyi Seetharaman is a CNBC anchor
LM Funerals could fetch £100m
Private Equity backed LM Funerals, one
of the UK’s largest funeral operators, is
being sold by London-based owners
Sovereign Capital for £50-100m. LM,
which was purchased by Sovereign in
2003, is said to be attracting interest
from rival private equity firms LGV, ECI
and LDC. LM bought five funeral direc-
tors in 2010, giving it 65 sites overall.
CITYA.M. 7 FEBRUARY 2011 News 15

CITY MOVES | WHO’S SWITCHING JOBS Edited by Juliet Samuel in association with

the CBI’s companies committee. He has private sector investment in infrastruc-

Pinsent Masons
The law firm has appointed Barry Vitou (pic-
tured) to its dispute resolution team. He joins
the firm from the London office of US firm
Winston & Strawn, where he headed its regula-
tory and tech practice. He will be working with
Danvers Baillieu, a senior associate advising on
online and tech business issues. Vitou has han-
dled many cases on cross-border fraud and is
an expert on the Bribery Act. The firm also
recently hired barristers Neil McInnes and Ben
Long from Bindmans and Furnival Chambers
respectively.
ICAEW
The Institute of Chartered Accountants
in England and Wales (ICAEW) has
elected Deloitte partner Martyn Jones
as its next vice president. He will take
office at the beginning of June and will
be nominated as president in June
2013.
Jones has 30 years’ experience in
chartered accounting and has spent
years in leadership roles, having worked
as chairman of Deloitte’s corporate gov-
ernance services group, on BTTL’s glob-
al audit technical advisory board and on
also been a member of ICAEW’s council
for the last four years and has sat on
several of its committees.
KPMG
Matt Firla-Cuchra has been appointed
as a partner in the firm’s infrastructure
team in its corporate finance practice.
He joins KPMG from Oxera
Consulting, an economics and finance
boutique consultancy. He has been
brought in to boost the firm’s utilities
and infrastructure expertise in light of
the government’s plans to encourage
ture.
John Lewis
The retailer has appointed Baroness
Sarah Hogg and David Anderson as
non-executive directors. They will take
up their roles today. Lady Hogg is cur-
rently chairman of the Financial
Reporting Council and a senior inde-
pendent director of BG Group. David
Anderson is a non-exec of NFU Mutual
Insurance Society and chairman of the
think tank Mutuo and of the Reclaim
Fund.

To appear in CITYMOVES please email your career

updates and pictures to citymoves@cityam.com SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT +44 (0)20 7557 7245
morganmckinley.com

Miners could
hoard record
2010 profits
▲

RESOURCES reports its full-year 2010 results on 10

BY ALISON LOCK
THE world’s biggest miners could
keep dividends in check despite being
forecast to double their billion-dollar
2009 profits, fund managers warned
yesterday.
Companies such as BHP Billiton,
Rio Tinto, Xstrata and Anglo
American are set to report record
February, up from $4.9bn in 2009.
Anglo American is due to double its
full-year net profit to almost $5bn.
BHP Billiton, the world’s biggest
miner, is forecast to make $30.5bn
profit before tax, up from $19.6bn a
year earlier.
Neil Gregson, manager of the JPM
Global Mining Fund at JP Morgan
Asset Management, said he expected

2010 results in the next two weeks on
the back of a commodity price boom
fuelled by demand from China.
But hefty capital expenditure pro-
grammes and the pursuit of expen-
sive acquisitions mean investors may
be disappointed.
“There is a general expectation in
AN EDUCATION IN RISK.
miners to raise dividends cautiously.
“Mining companies are going to be
generating a lot of cash flow this year
but they all have a lot of capital expen- THE DIFFERENCE BETWEEN
diture planned as well,” he said.
But some are issuing large payouts,
with Brazilian iron ore miner Vale
has pledging a $4bn dividend.

CONTROL & CHAOS

the market that mining companies
will signal some form of cash return ANALYSIS l Rio Tinto
through either share buy back or spe- 4,497.00
4,600 p
cial dividends,” said Malcolm 4 Feb
4,500
McPartlin, a fund manager at Aegon
Asset Management. 4,400
“But my feeling is they will proba-
4,300
bly disappoint, because these compa-
nies are looking to invest further in 4,200
organic growth opportunities or
M&A deals.” 4,100
Rio Tinto is expected to make about 4,000
$14bn (£8.7bn) pre-tax profit when it 24 Nov 15 Dec 10 Jan 28 Jan

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beverage and specialties arm in a deal
that could be worth £200m.
Final bids for the business, which
makes lids for drink and food contain-
ers, are expected this week.
A Rexam spokesman said that the
company was considering options for
the unit.
Shares in the company closed at
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£3.1bn pounds.
Bankers have long said Rexam is an
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TRANSPORT
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 16 Focus on Genzyme bid CITYA.M. 7 FEBRUARY 2011

Genzyme boss
TIMELINE | SANOFI-AVENTIS
APPROACH FOR GENZYME

Feb-May 2010
Sanofi reviews its strategic options, includ-

set for $300m

ing an acquisition of Genzyme.

23 May 2010
Genzyme chief executive Henri Termeer
said he was open to discussing a transac-

share payout
tion, but asked to wait until after the com-
pany’s shareholder meeting in June as he
tried to fend off a proxy battle with key
shareholder Carl Icahn.

9 June 2010
Genzyme announces settlement with Icahn
and appoints two directors designated by
▲

PHARMACEUTICALS
BY ELIZABETH FOURNIER
GENZYME chairman and chief execu-
tive Henri Termeer stands to pocket
around $300m (£186m) if Sanofi
Aventis’ $19.4bn cash bid gets the
green light, as looked increasingly like-
ly last night.
If priced at $74-per-share, the
takeover deal would mean that the
Genzyme board’s combined stake in
the company would be worth more
than $1.4bn, with the biggest potential
payouts going to Termeer, who holds
4.1m shares, and independent director
Ralph Whitworth, with 10.6m.
Termeer, who joined Genzyme in
1983 and became chairman in 1988,
indicated last year that a successful
takeover could provide the perfect
opportunity for him to step down at
the age of 65, though speculation
remains over whether he could take
an active role in the new management
or remain on the board as a director.
His tenure was recently criticised by
who indicated that a change at the top
was necessary to drive the company
forwards.
Termeer, who was paid $11.5m in
2010, is also likely to get a significant
pay-off if Sanofi Aventis decides he
should step down.
If he retained a stake in the
absorbed company, Termeer could still
benefit from the tradable contingent
value right – a delayed payout linked
to the performance of Genzyme’s
experimental multiple sclerosis drug,
Lemtrada.
ANALYSIS l Genzyme
74 73.40
$ 4 Feb
73
72
71
70
Henri Termeer could pocket $300m if the deal goes through
Pair can solve each other’s issues
PFIZER’S decision to close its British
research facility, leading to the loss of
around 2,000 British jobs, was last
week held up as an example of the
government’s failing industrial policy.
But it was also a sign that the pharma
industry is in ill-health. Sanofi’s deci-
sion to snap up US-based Genzyme
tells a similar story.
As with Pfizer, and to a lesser
degree GSK, Sanofi’s drugs pipeline is
looking worryingly empty. Last sum-
mer, the French drugmaker failed in a
last-ditch attempt to stop the approval
of generic versions of Lovenox, the
blood-thinning drug that accounts for
some $4bn of group sales. The bulk of
its other best-sellers will also lose their
patent protection over the next few
years.
Picture: REUTERS
That is why Chris Viehbacher,
Sanofi’s acquisitive chief executive, has
hit the buyout trail again. At first
glance, Genzyme – a firm that is
bedevilled by regulatory and produc-
tion problems – seems an odd choice.
But like Ireland-based Shire, it focuses
of niche high-margin treatments for
rare genetic diseases, which means
patents are less of a headache. In that
sense, the strategic rationale makes
sense. Sanofi has the scale and expert-
ise to help solve Genzyme’s manufac-
turing problems, while Genzyme has
products that are relatively safe from
generic insurgents
BOTTOMLINE
the financier.
2 July 2010
Media reports say Sanofi mulls large US
biotech acquisition.
28 July 2010
Sanofi’s board revisits a proposed transac-
tion with Genzyme through a letter outlin-
ing the terms of an acquisition.
29 August 2010
Sanofi publicises its letter to Termeer offer-
ing $69 per share for Genzyme. Genzyme
publicly rejects the bid.
4 October 2010
Sanofi-Aventis made a hostile $18.5bn bid
for Genzyme after failing to enter into
friendly negotiations.
13 January 2011
The European Commission grants merger
approval to the proposed takeover.

Genzyme founder Sheridan Snyder, 24 Nov 14 Dec 03 Jan 21 Jan Analysis by David Crow

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CITYA.M. 7 FEBRUARY 2011 News 17

Relationship with Middle East is vital to City

a City business delegation to the Gulf.
But the very fact that recent events
have had a ripple effect on interna-
tional markets highlights how the
region is an increasingly important
player on the global financial stage.
Business thrives in a stable environ-
ment and the current uncertainty
CITY COMMENT benefits nobody.
For that reason we hope for a rapid
MICHAEL BEAR and peaceful resolution to the insta-
bility affecting Egypt and other coun-
investment has come from the Gulf –
totalling £1.39bn last year – across sec-
tors as diverse as banking, infrastruc-
ture, real estate and sport.
UK KEEN TO STAY TOP GULF PARTNER
So during our time in the UAE, Qatar
and Saudi Arabia we will be working
hard to remain the Gulf’s partner of
choice when it comes to financial and
professional services. This is part of a
wider Gulf initiative that has brought
£15bn worth of goods and services,
which is on a par with China and
India combined. And, in spite of the
economic downturn, UK exports to
the region have increased 18 per cent
in the last year alone.
FLOW OF EXPERTISE IS TWO WAY
The Gulf States are no longer – if they
ever were – simply sources of hydro-
carbons and investment funds. The
flow of capital and expertise today is
Infrastructure development is cru-
cial to all the Gulf countries – as of
course it is to the UK.
An estimated £1.36 trillion in infra-
structure projects is currently
planned or underway in the region.
The City has considerable experience
in mobilising the capital needed for
such large-scale development.
From the City’s perspective, we
believe that sharing skills and experi-
ences will ensure this longstanding

W
ITH events unfolding in
Egypt and the Middle East
continuing to dominate the
headlines now might not
seem like the best time to be leading
tries in the Middle East.
The City has long been known for
being internationally owned, staffed
and managed.
A considerable part of this inward
over 40 ministers – responsible for a
wide range of interests – to the region
since last May.
In 2009, the Gulf was our seventh-
biggest export market at around
firmly two-way.
Closer partnership will support the
regional goals of economic diversifi-
cation, growth and infrastructure
development.
relationship continues to go from
strength to strength despite the
recent turbulence.
Michael Bear is Lord Mayor of the City of
London

NEWS | IN BRIEF
Firms fight
SUPER BOWL AD REVENUE TOPS $210M
Carillion renegotiates contracts
Outsourcer Carillion has secured a 20
per cent saving with several suppliers it

for shrinking holds existing contracts with, as part

of efforts to save £140m by 2013.
Several arrangements have been made
with Carillion where suppliers have
agreed to hand back up to 20 per cent
of the value of the work they had

public purse already agreed to. The support services

group is attempting to cut its supplier
base from 25,000 companies to 5,000
in a system of electronic auctions
where firms bid against each other for
contracts.

SUPPORT SERVICES Auto Windscreens seeks cash

▲

BY ALISON LOCK
THE squeeze on government spend-
ing has led to a dramatic rise in com-
panies’ complaints to the Treasury’s
procurement advisory unit and a
surge in Freedom of Information (FoI)
requests, research showed today.
Companies unhappy with the out-
come of government tenders are lodg-
ing a growing number of complaints
challenging its decisions.
Firms are also increasingly using
FoI requests to find out more about
their rivals’ bids for tenders, the
research by law firm EMW showed.
Complaints lodged with the gov-
ernment’s Office of Government
Commerce to dispute tender deci-
sions jumped by 84 per cent in the
year to September 2010 compared to
2009, from 31 to 57. The number of
complaints it investigated also rose
almost 30 per cent, to 27 from 21. A
company that has won a contract
cannot start work until all com-
plaints made to the OGC are resolved.
EMW consultant Simon Vumbaca
said companies uncertain of their
pipeline of work were becoming
more protective of contracts they felt
they should have won.
“There is a lot at stake,” he said.
“Some companies are using the com-
plaints system...to delay their com-
petitor from starting the project.”
FoI requests are used to find and
challenge weaknesses in a decision.
“It is one of the tools in the arsenal
to find a way to challenge a decision.
No stone is left unturned to find out
whether a decision has been awarded
fairly,” said EMW principal Giles Ferin.
The government has cut departmen-
tal budgets by an average 19 per cent
over four years to rein in the deficit.
The bankers to Auto Windscreens,
Britain’s biggest supplier of replacement
car windows, have appointed consult-
ants to find a buyer for the ailing firm.
The company’s main lender, Lloyds
Banking Group, has appointed Deloitte
to look for new investors. Auto
Windscreens, which has 1,400 employ-
ees, is said to be close to needing fresh
funds.
Pattonair eyes £200m sale
Pattonair, a supplier to the defence sec-
tor, is to be put up for sale for more
than £200m. The company’s listed par-
ent Umeco, has appointed Rothschild to
advise on the sale of the business. Lloyds
Banking Group’s private equity unit,
Lloyds Development Capital, is said to be
LAST night’s Super Bowl clash between the Pittsburgh Steelers and the Green Bay Packers in exclusive talks as a potential buyer.
was expected to generate more than $210m (£130.5m) in advertising revenue, with com- The Derby-based firm supplies parts to
panies paying up to $100,000 a second to secure a piece of the lucrative airtime. Rolls Royce, BAE and Boeing and
Picture: REUTERS employs more than 250 staff.

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CITYA.M. 7 FEBRUARY 2011
More people
should be The
Apprentice
Apprentice winner
Tim Campbell on
why apprenticeships
are vital for London,
by Steve Dinneen
W
HEN the City opened its doors to
the barrow boys of the East
End – the wheeler dealer mar-
ket traders who were first let
loose on the London Stock Exchange in
the 1980s – they were a roaring success.
They had the drive, the hunger and the
charisma to allow them to thrive in the
pressure-cooker environment of the trad-
ing floor. “When I look at young people
from inner city areas today I see those
exact same attributes.”
Tim Campbell has come a long way
since winning the first season of Lord
Sugar’s The Apprentice. The former
Transport for London manager has a
dream of sparking a second City revolu-
tion, bringing a new generation of disillu-
sioned youth into the financial services
industry and blowing away the cobwebs of
the Gordon Gekko era.
“I think a lot of young people have this
blinkered view that the Square Mile is still
all toffs from elite schools with posh
accents and double breasted suits,” he
says. “But the City is changing.”
Campbell is helping to drive that
change by throwing his weight behind a
government-backed apprenticeship
scheme, timed to coincide with National
Apprenticeship Week, which starts today.
The project, supported by Boris Johnson,
is aiming to vastly increase the number
of people taking part in on-the-job train-
ing.
It received a blow this week, with new
figures suggesting more than a quarter of
apprentices drop out before their place-
ments are finished (although this is down
from around 75 per cent in 2002).
But Campbell is convinced the project
can help get young people into work. He
says the biggest misconception is that
apprenticeships are for “people in boiler
suits who are going to go off and bang
pieces of metal”. While these jobs exist,
the scheme boasts 80 different industry
sectors, with an emphasis on finance.
“There is work for people who want to
do administration and people with
degrees who want to go into high-flying
institutions. It really covers all the bases”.
Sitting with me today wearing a sharp
blue suit and waistcoat, Campbell is a clas-
sic case of a “working class boy done
CV | TIM CAMPBELL
Born: 27 June 1977.
From: Stratford, east London.
Education: St Bonaventure's RC School - 3 A-Levels and
11 GCSEs.
Psychology BSc, Middlesex University.
Human Resource Management CIPD Thames Valley.
Career: Graduate trainee for London Underground.
Resourcing consultant and senior planner for London
WORDS BY STEVE DINNEEN Interview 19
“Boris looked
me in the eye
and con-
vinced me he
is passionate
about helping
disadvan-
taged young
people”
good”. He was raised in a poor household
in Stratford – an area that is undergoing
regeneration on an unprecedented level.
Now he can boast his own charity, a
concierge business, a tailoring company, a
non-executive position at a financial
recruitment business and various invest-
ments among his interests.
And while Campbell is best known for
winning The Apprentice, he says his selec-
tion as an ambassador of the project is no
publicity stunt.
“Boris came along to an event my chari-
ty was hosting and asked me if I’d work
with him on the scheme. I was a bit wor-
ried it might just be a tokenistic thing,
which I’m not interested in. But I looked
him in the eye and he convinced me he is
passionate about helping young people.
“He’s an incredible ambassador for
London, always promoting it. I remember
him talking to a French delegation about Sharp-suited Tim
business in London. He had visited a bak- Campbell wants to spark
ery in Walthamstow and he told the min- a revolution in the City
ister that he should let French people eat
cake – British cake.”
Campbell quit his £100,000-a-year job Picture:
with Lord Sugar after two years. He MICHA THEINER
describes his time there as inspirational, /City A.M.
but says Lord Sugar “certainly got his
pound of flesh”.
“There was no sitting around twiddling
your thumbs. You have to work for a six
figure salary. I launched a product that
went on sale in Harrods and Argos – both
ends of the spectrum – and I got some
amazing insight out of that.”
After leaving Amstrad he started a char-
ity called the Bright Ideas Trust, working
with young people from inner city areas
who have ideas for starting businesses.
The scheme, backed by Bank of America,
has already helped start 26 companies,
taking a line of young people “from the
dole queue to the tax system”.
While his charity is doing good work in
attracting young people into business, he
says institutional change is needed to edu-
cate young people in finance.
“It’s incredibly important to put busi-
ness literacy in schools. What I want is for “Letting East
people to have a greater understanding of
how business works so they can be better End barrow
business owners or consumers.”
To implement this properly, he says the boys into the
private sector must get involved.
“We have this antiquated view that we City was a
need to keep the private and public sectors
separate but it’s ridiculous. The private roaring suc-
sector could quite easily roll out a finan-
cial education scheme.” cess. I see the
For now, Campbell will concentrate on
working directly with young people, pro- same traits in
viding them with the help he says was key
to his own achievements. With the inner city
apprenticeship scheme, he should get the
chance to inspire many more young peo- youth now”
ple to emulate his success.
public transport, where Campbell was the youngest
middle manager the company has ever had.
Director of Health & Beauty at Amstrad.
Chief executive at the Bright Ideas Trust, a charity set
up to help young people get involved in business, offer-
ing mentoring and financial backing.
Notable achievements and hobbies: Wining BBC’s The
Apprentice. Enjoys boxing and martial arts.
Family: A daughter and a son.
 20 News
The City’s top headhunter on why
firms still need to recruit the best
Odgers Berndtson’s
Richard Boggis-Rolfe
on why he thinks that
2011 will be a tough,
uncertain year
P
ERHAPS not surprisingly, Odgers
Berndtson’s boss was in an upbeat
mood when City A.M. visited him
recently in his large office overlook-
ing Hanover Square in the West End. Last
year’s preliminary revenues had just come
in: they are an improvement on the year
before, always welcome news in the pres-
ent environment.
Richard Boggis-Rolfe, the privately-held
firm’s chairman, thinks 2011 will be long
and uncertain, but these numbers give the
headhunting boss, who has spent 30 years
in the industry, the sense that the recovery
is beginning to gain traction.
Last year, the partnership, which
employs 1,000 staff across 45 offices world-
wide, produced sales of $230m (or £143m;
the firm is still working out profit figures),
compared to $212m the year before. As
part of this, its UK (and largest) office,
which employs 400 people, including the
former Tory cabinet minister Baroness
(Virginia) Bottomley of Nettlestone, made
£72m, compared to £63m a year ago.
Boggis-Rolfe, a sprightly 60-year old, says:
“I am fundamentally optimistic. Having
the right people in key jobs is crucial to the
good running of a company, and that need
is as great as it has ever been.” But he adds:
“It may be a difficult year. There may be
more industrial action, more pressure
from inflation. Professional service firms
like lawyers, accountants and us thrive on
corporate activity. But companies tend to
postpone decisions in this climate. There
will be a lot of hanging on this year.”
Odgers Berndtson is one of the six
biggest executive search firms in the
world, coming behind larger US rivals
such as Korn Ferry and Spencer Stuart.
But it is the only UK firm that operates on
such a global scale.
WORDS BY ROGER BAIRD
“Workers are
free agents
looking to
better their
lives. What
we do makes
the [job]
market more
perfect.”
Odgers Berndtson The firm specialises in filling top jobs in
chairman and chief a wide variety of sectors. It placed former
executive Richard City minister Paul Myners on the Marks &
Boggis-Rolfe in the Spencer board; installed the governor of
foyer of his London the Bank of Ireland, Richard Burrows, as
headquarters on chairman of British American Tobacco; it
Hanover Square is in the middle of filling the key spots for
the organising committee of the Brazilian
Alex Ridley/City A.M. Olympics. It performed the same function
for the London organising committee.
Boggis-Rolfe, a clubbable chap who
spent ten years in the army before taking a
history degree at Cambridge and then
going into recruitment, adds:
“Government work held up incredibly well
for us last year. Although the coming
spending cuts mean that this will fall this
year. But so far this year we are beginning
to see commercial activity rise.”
Boggis-Rolfe started in the industry in
the early 1980s at US giant Russell
Reynolds. After gaining experience at a
number of firms he bought Odgers in 1997,
which then employed just 25 people. From
early on, he “had a deliberate strategy to
have a wide spread of business”.
Finding placements in the financial
services sector accounts for 20 per cent of
the group’s sales, and other high-paying
private sector jobs make up another 40 per
cent. But 20 per cent of sales come from
filling public sector posts, while the
remaining 20 per cent of sales come from
filling lower paid (under £150,000 a year)
public and private sector jobs.
When Boggis-Rolfe started off in execu-
tive search, he moved in quite a secretive
world. But he baulks at that description
now. “Virtually every executive has either
been contacted by a headhunter, or has
used them,” he says. “Now it is almost the
case that if you do not use a headhunter to
help fill a top job, you may be accused of
handing out jobs for the boys.”
When the Odgers boss began in the busi-
“Companies ness his desk would be surrounded by
scores of rolodexes and business cards, but
hang on and now computer databases have “trans-
formed the way you gather basic informa-
postpone tion about people”.
The scope of the headhunter has also
decisions in changed. He says: “When I started we were
all generalists. Now it is much more com-
this climate. mon to specialise. We have a partner here
and all he and his team do is recruit chief
There will be financial officers. He knows the market
and who might be ready to move.”
a lot of The headhunter says a trustworthy repu-
tation and the ability to access top people
hanging on is important to the firm.
Bottomley has worked for the business
this year.” since 2005 and now chairs the firm’s board
and CEO practice. “Everyone takes her
CITYA.M. 7 FEBRUARY 2011
call,” smiles Boggis-Rolfe.
However, the firm’s more recent high-
profile hire did not work out as well. In
2009 it took Johnny Cameron on as an
adviser; he had been head of investment
banking at Royal Bank of Scotland when it
was bailed out by the government in 2008.
But after only a couple of months,
Boggis-Rolfe had to let Cameron go after
his role came to light and the government
threatened to remove Odgers Berndtson
from its roster if he remained at the firm.
Boggis-Rolfe says: “I think it is important
that people who make mistakes are able to
redeem themselves. But the marketplace
was not ready for his return.”
Headhunters typically take up to one
third of the first year’s salary of the execu-
tive they place in fees. And the individual
headhunter responsible will in turn take
one third of that as a bonus.
At Odgers, teams normally work in units
of three or four, made up of a partner, one
or two juniors and a researcher. But for
Boggis-Rolfe, a key part of how the firm
operates is the weekly brainstorm his sen-
ior partners have over its current list of
mandates.
He says: “It’s a chance to share knowl-
edge across the firm, and also it is an
opportunity to show off how many key
people you know. The answer to filling a
post may not lay in one set of contacts. For
instance, over the past few years we have
recruited a lot of business people to work
in the public sector, like Paul Deighton
[who moved from European chief operat-
ing officer at Goldman Sachs to CEO of the
London Organising Committee of the
Olympic Games]. That was a result of our
finance, commercial and public sector
teams working together.”
But executive search firms are often
accused of artificially stimulating a corpo-
rate jobs merry-go-round and of being
inflationary in terms of pay and benefits.
Boggis-Rolfe responds: “Workers are free
agents who are looking to better their lives.
I think what we do makes the market a bit
more perfect. We help get more informa-
tion about good jobs get out, and compa-
nies get better applicants to choose from.”
On executive pay inflation, he says: “It
used to be that in public companies it was
hard to find out about salaries. But now
there is so much transparency, and it is
this feature that has served to push up
salaries. But it is undoubtedly true that all
moves are inflationary. All movement cre-
ates heat.”
If Boggis-Rolfe is right about that, he will
undoubtedly be hoping that as this year
gathers pace, it becomes a case of out of
the frying pan and into the fire.
CV | RICHARD BOGGIS-ROLFE
Age: 60
Work: Joined the Coldstream Guards in
1970, left as a Major in 1980; director at
Russell Reynolds Associates, 1983;
Norman Broadbent International, 1984-97;
managing director at Norman Broadbent
(Hong Kong) 1986; chairman at Barkers
Human Resource Advertising, 1992-97;
chairman at NB Selection 1995-97, (chief
exec 1987-95), group managing director at
BNB Resources 1995-97, chairman and
chief executive at Odgers Berndtson 1998
Education: Trinity College, Cambridge, MA
in history; London Business School.
Lives: Gloucestershire; flat in London
Hobbies: Horseriding, gardening
CITYA.M. 7 FEBRUARY 2011
More profit
warnings to
come in 2011
▲
ECONOMICS
BY JULIET SAMUEL
THE number of profit warnings is due
to rise this year after sliding to a
record low in 2010, according to analy-
sis by UBS.
Analysts at the bank emphasised
that profit warnings are already on
the rise, with January seeing as many
warnings as the whole of the fourth
quarter in 2010.
Last year saw just 196 profit warn-
ings, compared to an average of 342,
the analysts said, citing data compiled
by Ernst & Young. The fourth quarter
of last year saw the number of warn-
ings rise to 51, concentrated in IT,
media, retailers and support services.
And UBS expect UK firms to be
stretched, despite a record high of 62
in the manufacturing purchasing
managers’ index for January.
“Inflationary pressures showed up
in record rises in input costs and high-
er output prices,” UBS said of the PMI
survey.
Analysts blamed the uptick of
warnings at the end of last year on the
IT and services sectors’ exposure to
contract cancellations and postpone-
ments due to government cuts.
Snow also played its part for the
consumer sector, prompting the ana-
lysts to conclude: “Even Mother
Nature appears to be against a smooth
US lift for FTSE as geopolitical concerns abate
MARTIN ON
THEMARKETS
MARTIN SLANEY
T
HE FTSE 100 is looking set to open
back up above the psychologically
important 6,000 level this morn-
ing, taking its lead from a belated
WALL ST WEEK AHEAD
W
ITH earnings continuing to
surprise on the upside and
minimal technical resist-
ance ahead, the bears may
have to wait a bit longer for the much-
anticipated end to the current stock
rally.
The VIX, a gauge of investor anxi-
ety, dropped last week despite unrest
in the Middle East and oil prices are
recovery.”
And the bank predicts that further
warnings could continue to be con-
centrated among retailers: “Tougher
times are ahead for the retailing sec-
tor when household incomes are
under more pressure in face of poten-
tially higher tax bills, mortgage costs
and rising unemployment,” it said.
The analysts also suggested that
warnings are less likely among inter-
national FTSE 100 firms with expo-
sure to demand in higher-growth
markets.
Despite the overall drop in warn-
ings last year, aerospace and defence
saw profit warnings double as govern-
ments dropped contracts globally.
The sectors where the number of
warnings fell most in 2010 were indus-
trial engineering and electrical equip-
ment, which were 60 per cent down
on 2009.
ANALYSIS l Profit warnings and GDP
1.5 160
%
1.0 Warnings GDP
120
0.5
0.0
-0.5 80
-1.0
-1.5 40
-2.0
-2.5 0
Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4
07 08 08 09 09 10 10 11 11
rally in US stocks after the close of
European bourses on Friday.
GFT is quoting the FTSE 100 index to
open up 23 points from Friday’s close,
at a level of 6,020. Elsewhere in Europe
the German Dax is called up 13 points
at 7,229, and the French CAC is quoted
up 10 points to open at 4,057.
Important US jobs data was mixed
on Friday with the payrolls number
coming in at a lower-than-expected
36,000, but the unemployment rate
dropping 0.4 per cent to 9 per cent.
Ultimately, optimistic US investors
chose to focus on the positive, an
unemployment rate at its lowest level
since April 2009, and Europe is expect-
ed to take a similarly optimistic lead on
the open today.
Last week’s potential fly in the oint-
ment, the unrest in Egypt, caused little
more than a knee-jerk wobble to
Western stock markets. With money
basically unchanged from two weeks
ago. After posting its best week in the
past nine last week, the S&P 500 has
actually seen oversold levels tick
lower.
“I expect the market to continue to
rally despite the fact the economic
news is sluggish in the jobs front,”
said Michael Yoshikami, chief invest-
ment strategist at YCMNet Advisors in
BEST OF THE BROKERS
ANALYSIS l BG
1,500 p
1,429.00
4 Feb
1,400
1,300
1,200
1,100
8 Nov 26 Nov 16 Dec 10 Jan 28 Jan
BG GROUP
Deutsche Bank rates the oil explorer “buy”
with a target price of £13.34. The broker
expects BG to report upstream production
growth when it brings out fourth quarter
results tomorrow, with a predicted 12 per
cent rise in profit for the division. DB also
forecasts stellar reserves growth given
recent finds in Tanzania and China.
Hochtief seeking IPO or sale of unit
▲
CONSTRUCTION
GERMAN construction group
Hochtief is seeking an initial public
offering (IPO) or a trade sale of its
Concessions unit in 2011, said chief
executive Herbert Luetkestratkoetter.
“Unlike in 2009 (when an IPO plan
failed) we are also evaluating a sale to
investors,” Luetkestratkoetter told
German newspaper Frankfurter
Allgemeine Sonntagszeitung.
“Now markets have rebounded and
we are starting over again.”
Hochtief has picked Deutsche Bank
and Royal Bank of Scotland as advi-
sors.
now being switched out of emerging
market funds in favour of more devel-
oped markets, investors seem ready to
buy into any dips.
This Thursday’s interest rate decision
by the Bank of England will be a key
event, as though rates are widely
expected to remain on hold at 0.5 per
cent, cracks are starting to show in the
MPC thanks to continued inflationary
pressures. And with two members vot-
ing for a raise at the last meeting, the
timing of future rises is very much on
the radar.
Martin Slaney is GFT’s director of global deal-
ing operations.
California.
Government data showed on Friday
that the US economy created 36,000
jobs in January, far fewer than expect-
ed, but the unemployment rate fell to
its lowest since April 2009.
Economists agreed a recovery in the
labor market was proceeding but not
gaining speed.
Upbeat signals in the economy,
News 21
ANALYSIS l Schroders
1,950 p 1,851.00
4 Feb
ANALYSIS l Barclays
320 p
310
309.85
4 Feb
1,850 300
290
1,750
280
270
1,650
260
250
8 Nov 26 Nov 16 Dec 10 Jan 28 Jan 24 Nov 14 Dec 3 Jan 21 Jan
SCHRODERS BARCLAYS
RBS rates the asset manager “buy” with a JP Morgan Cazenove rates the bank “neu-
£21 target price. The broker forecasts tral” with a target price of 320p. The bro-
operating profit of £391m when the firm ker expects the bank to post underlying
reports its full year figures in March – a income of £30.3bn for 2010, with 26.1p
106 per cent year on year rise. It also sees earnings per share. It hopes to see signifi-
a 6.2 per cent rise in fourth-quarter assets cant restructuring of Barclays Capital,
under management, and a two to four per which JPM expects to report disappointing
cent jump in earnings per share. fourth-quarter results.
To appear in Best of the Brokers email your research to notes@cityam.com
At the end of June 2010, Hochtief prepared to sit down and talk about
valued Concessions, which specialises an investor agreement with ACS, but
in the construction and operation of he is not planning to step down from
airports, roads and other public infra- his position.
structure projects, at €1.6bn (£1.3bn). Referring to a planned meeting
Sources said in January that with ACS head Florentino Perez,
Hochtief is seeking to sell its Luetkestratkoetter told the newspa-
Concessions unit in the second quar- per: “We will indeed meet shortly and
ter in a fresh attempt to keep Spanish then we can see what we do together.
bidder ACS at bay. Until now, we have always talked
In the meanwhile, the Spanish con- rationally.”
struction and services group has He added he expects ACS to contin-
passed the 30 per cent threshold with ue to support Hochtief’s strategy for
its Hochtief stake, allowing it to raise expanding in India and Canada.
its holding further without another Weekend reports said Hochtief
full bid. works council chief Siegfried Mueller
Luetkestratkoetter has said he is has stepped down.
ANALYSIS l FTSE
6,100
5,997.38
4 Feb
5,900
5,700
8 Nov 26 Nov 16 Dec 10 Jan 28 Jan
ANALYSIS l DAX 7,216.21
7,200
4 Feb
7,000
6,800
6,600
8 Nov 26 Nov 16 Dec 7 Jan 20 Jan
coupled with a positive bias in the 10 months.
current earnings season, should con- The energy, industrials and tech-
tinue to propel equities higher. nology sectors are “trading well into
More than 70 per cent of the S&P overbought territory,” according to a
500 companies have reported earn- report from Bespoke Investment
ings above estimates so far, according Group. But two recent weeks of
to Thomson Reuters data. Investors declines are helping ease overall sell-
expect aggregate earnings rose 37 per ing pressure, and the rally that start-
cent in the last quarter, the highest ed in September shows no signs of
estimate for that period in more than weakness.
 Business Features | Private Banks
22 CITYA.M. 7 FEBRUARY 2011

Winning the icy chukkas – the bank

that hosts a snow-polo tournament
Daniel Knowles speaks to a firm
that is as keen in the saddle as it
is dealing with huge fortunes

T
HE game of polo is one of the oldest The Berenberg snow-
sports in the world. Originating in polo team charges
ancient Persia, it is thought to have through champagne
begun as a way of training elite cav- bottle goals to the
alry troops. It was brought back to Europe final
in the 19th century through the Calcutta
Polo Club, established by two British offi-
cers in India who formalised the rules. But
they would hardly have imagined this lat-
est and most exciting variation – polo
played on snow, against the backdrop of
the gorgeous Swiss Alps.
Held in Klosters each year, the small, tra-
ditional alpine resort favoured by the
Royal Family, the Berenberg annual snow-
polo match is the must-go warm-up event
for the Davos economic conference. Unlike
other snow-polo matches, the Klosters
tournament is held mostly (though not
entirely) at night, so that the distinguished
guests can ski during the day.
The event is the perfect cocktail of
money and power, attended by a fabulous
mix of German industrialists, British and
Argentinean polo players and the occasion-
al shabby journalist. The polo field is a
vast, snowy expanse, with the goals at each
end marked by huge inflatable cham-
pagne bottles. Surrounding the arena is a
six-foot tall ice wall, on which spectators
can perch and watch the action from
above. The atmosphere is electric, as horses
rush past and the bright orange ball flies
about and into the crowd.
This year, the event is rather special, at
least for the Brits scattered around the lav-
ish VIP tent. Berenberg, Germany’s oldest
private bank and the sponsor of the tour-
nament, is launching its private banking
operation in the UK. Leading the
Berenberg polo team out through the icy
chukkas is Fred Hervey, one of Berenberg’s
two new British private bankers. He and
Ross Elder both recently left Barclays
Wealth’s private banking section for
Berenberg, and they seem almost childish-
ly excited by their new roles – although
perhaps that is just the polo match atmos-
phere.
they are consistent in their policy.” tures endanger the the bank.” in a way other similar banks struggle.
A TRADITIONAL, FAMILY OWNED BANK But Brodtmann is adamant that while Underpinning it all is a solid, pragmatic The technology also allows the bank to
“The very first element – what really drew Berenberg is prudent, it is not conserva- approach to business. For all its tradition, automatically reimburse its clients any
me in – was the 420 years of history. The tive. “Unlike other traditional banks, we the bank has invested extensively in a very third party payments the bank receives –
bank is over a hundred years older than have grown our business quite substantial- up-to-date information technology system. such as trail fees from funds. “Berenberg is
Coutts and nearly that over Hoare and Co,” ly. When I joined, we had around 300 peo- 120 of its employees are in the IT depart- way ahead,” says Elder. “We want to pro-
says Elder. “And it still has the structure of ple in the bank. Now it is closer to 1,000. ment. vide genuinely unconflicted advice to our
a family owned business, even after all this We have offices in 17 cities abroad and in “All the technology is proprietary,” says clients.” While Berenberg has a large
time.” Germany. So we are growing – but while Elder. “There are no outside solutions bolt- investment bank business in London
The bank is structured as an unlimited we grow, we are always in control of risk. It ed on.” That means that the bank can offer already, Elder and Hervey stress that they
liability partnership, and so the partners is organic, and we will not let new ven- extensive performance reports to clients, are not providing repackaged investment
are entirely liable for the banks’ losses – bank products.
even (for five years) after they leave the FACT BOX | BERENBERG BANK Instead, the objective is client retention.
company. And unlike larger banks, The bank takes a minimum portfolio size
Berenberg was never in risk of needing a Joh. Berenberg, Gossler & Co. setting up the trading house which later turned into the of around £1m. “We want to be able to pro-
bailout. It maintains a core capital ratio of bank. vide every client with the same kind of tai-
13.5 per cent – the Basel III regulations are History: lored, personal service, regardless of
only raising the requirement to 7 per cent. Founded in 1590 in Hamburg, by brothers Hans and Paul Assets under management: portfolio size – we couldn’t manage
As Andreas Brodtmann, one of Berenberg, Berenberg is Germany’s oldest private bank. Berenberg has more than €25bn of assets under man- £150,000 or £200,000 accounts, so we don’t
Berenberg’s three managing partners, The Berenberg brothers were not in fact German how- agement, and a balance sheet of €3.4bn. take them”.
argues, unlimited liability “keeps you care- ever, but Dutch. But expanding into Britain will not be
ful, and not too risk minded, because you Awards: easy. Hervey and Elder will be hoping the
always have to bear in mind what could go In 1585 the brothers were forced to flee the commercial Winner of the Euromoney private banking survey of competition with more established British
wrong.” “We have a very consistent organi- hub of Antwerp for being Protestant. Many of the 2010. banks doesn’t go the same way as the polo:
sation structure, our managing partners refugees in Hamburg were among its most entrepre- Ranked first in research, sales and corporate access Despite Hervey’s best efforts, Aston
are not like CEOs or chief financial officers neurial inhabitants, and the Berenberg brothers thrived, among German mid caps by Thomson Reuters. Martin’s team beat Berenberg 12-10 in the
– they are there for a long time, and so final.
 Wealth Management | Spread Betting
23

Forget gold,
THE TIPSTER
INVESTORS
HEAD FOR

here’s the HAVENS

W
ITH uncertainty continuing
over the situation in Egypt,

copper rush bearish investors are coveting

the safe haven assets once
again. After retreating from the $1,400
level at the start of the year, gold is now
creeping higher but with no signs of fur-
ther contagion in the geopolitical sphere,
the risk aversion stance could arguably be
seen as a little overdone. IG Index’s cur-
rent price on daily spot gold is $1,349.50-
Donata Huggins asks how long $1,350.
The news that house prices rose 0.8
the orange metal can keep rising per cent in January is good news for
house builders worried about a decline in
sentiment as austerity starts to bite in
the first half of this year. Bellway

C
RACK open your piggy bank and
empty your penny jar. Do it now and
do it fast. Forget about the gold rush;
it is all about the copper rush now.
The price of the metal is going through the
roof, hitting $10,000 a tonne. This sort of
price action means the two pence piece in
your pocket is actually worth more than
2p. Sounds incredible, but how long can it
last?
A good while, it seems. David Jones, chief
market strategist for IG Index, says: “any
self-respecting technical analyst would
have to be a buyer. It’s not too ambitious to
project a target of $5 a pound as a medium-
term target.”
The same could be said for any self-
respecting fundamental analyst since the
most recent surge in price has not been a
reaction to the weather conditions in
Australia – the country that produces most
of the world’s copper. Amazingly, not a sin-
gle copper mine was closed during or after
the floods, and only the Mount Isa mine
and a refinery in Townsville were affected
for a week after the cyclone.
The price drivers for the orange metal
are much longer term. Both the developed
and developing world are keen to be fed
the metal as they grow, out of recession or
into new economic giants. China has used
up most of its stockpiled supply, and are
“living hand-to-mouth” on what they have
left of it, says Gayle Berry, a commodities
expert at Barclays Capital.
A 2p coin is now Homes will be hoping that upward
worth more than 2p. movement continues when they issue a
trading announcement today. CMC
Picture: PA Markets are offering a spread of
625.52p-627.76p.
As far as supermarkets go, traders
tend to focus on Tesco and Sainsbury’s,
with Morrison taking a backseat. But all
this seems to be changing as the volume
in the tiddler of the supermarket sector
Not only are mines struggling to offer law is often applied irrationally in these is on the rise. Daily average volume over
more copper, but the existing supply is places – mining licences can be issued and the last month has doubled to 10m
dwindling. Much like the oil industry, the revoked on spurious grounds, so many shares as interest ramps up a notch.
established mines are running low and companies find that making the several Along with talk of returning a significant
most of the world’s untapped resources billion pound investment required to set amount of capital to investors and
are in politically risky places: Afghanistan up a mine too risky to consider. This numerous broker upgrades, one doesn’t
and the Congo, for instance. And the prob- means that we can be fairly confident that need many more reasons to pick up the
lems don’t end there, these places tend copper prices will rise in the long term. stock. ETX Capital is quoting 278.2p-
also to have too few roads and railways, Indeed, Barclays Capital is tipping it to 278.7p for the Wm Morrison rolling
and the copper is buried far deeper under- their clients as the top commodity to daily contract.
ground so is more difficult to mine. The invest in, alongside tin. But Berry warns Mining giant Xstrata reports earn-
that in the short term she would not be ings on Tuesday and they are expected
ANALYSIS l The performance of copper surprised if the price pulled back slightly: to be strong, possibly around 50 per
500 “I think the Chinese might take longer to cent better than a year ago thanks to
come back into the market than many surging copper prices. The recent dip to
400 expect, perhaps not for a few more weeks.” the 100-day moving average at 1,350p
This sort of price dip should then be a was short lived, with the shares rallying
300 buying opportunity. Jones agrees, but back strong to 1,450p on heavy volume.
warns: “only if it slipped below the $4 With copper prices possibly about to
200
mark will it start to look as if the trend is break above $10,000 a tonne, the
running out of steam.” So until then the shares may retake the 1,550p highs in
copper rush is here to stay. Traders might the coming months. Spread Co offers a
100
find that if they look after their copper spread on Xstrata of 1,436.9p-1,440.1p.
Source: tradingeconomics.com pennies, the pounds will look after them- Donata Huggins
0 selves…
Jan 1992 Jan 1996 Jan 2000 Jan 2004 Jan 2008

THE WEEK AHEAD in association with

COMPANY NEWS COMPANY NEWS ECONOMICS POLITICAL NEWS

l FTSE 100 gold miner Rangold l Embattled travel firm TUI AG l US consumer credit figures for l US Commerce Secretary Gary
Resources releases its fourth is to hold its annual general meet- December are to be Locke will arrive in India
quarter results today. ing on Wednesday. released today at today on a mission to
20:00. make business deals.
l Natural gas group BG Group l The firm will also release its Tomorrow he will
releases its fourth quarter results first quarter 2010/2011 on l The German visit the Bangalore
tomorrow. Thursday, likely to be closely industrial produc- air show with air-
watched. tion measure for craft manufactur-
l Steel manufacturer December is to ers. It is hoped
Arcelor-Mittal also l Mining firm Rio Tinto be released that a deal to sell
releases its full releases its full year tomorrow at fighter jets will be
year results results at 7:00 on 11:00. reached.
tomorrow. Thursday.
l The Chinese pur- l New Labour shadow
l French food l On Sunday 13, chasing managers index chancellor Ed Balls and
company Apple is rumoured for services is out on George Osborne will face off in
Danone to be planning to Wednesday at 2:30. the House of Commons for the
releases its unveil a revised ver- first time on Tuesday.
full year sion of the iPad. l The Chinese trade surplus will be
results tomor- announced on Thursday at 2:00. l On Wednesday, Oliver Letwin
row l It may also reveal an and Danny Alexander will face
upgrade to the iPhone l The Bank of England is to the public accounts committee.
l Airline Air France- and iPad software – known announce its interest rate decision
KLM releases its third quar- as iOS. The event is likely to be for February on Thursday at 12:00. l On Thursday, there is a free
ter results at 17:45 on watched closely by traders and by The bank is expected to hold rates vote on prisoners’ voting rights in
Wednesday. technology fans. at their current level of 0.5 per cent. the House of Commons.
 24 Wealth Management CITYA.M. 7 FEBRUARY 2011

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 Lifestyle A JAPANESE GEM BY 25
THE GHERKIN
| Travel SOSEKI: REVIEWED IN
TOMORROW’S CITY A.M.

To the ends of the earth

From stunning desert rides to fine wines, a full spa, and an atmosphere
that is laid-back and outdoorsy-friendly
MORE QUALITY INCLUSIONS THAN ANY
barren volcanoes to glaciers, (walking boots at the bar? – absolutely).
From Explora Patagonia, my first excur- OTHER RESORTS ON THE PLANET
Chile is a land of breathtaking sion is by motor boat across Lake Pehoe to
the start of the hike to Grey Glacier. It’s

SAVE 30%
*
early in the season, October, and the walk-
extremes, finds Laura Ivill

C
HILE is a land of contrasts – and not
least for the euphoria of the miners’
rescue last year, preceded by the
coastal earthquake. But it is this
land – volcanic and alive, and rich in min-
erals – that entices me to travel half way
around the world to explore its natural
wonders, the northern desert versus the
southern pampas, on foot, by mountain
bike and on horseback.
From London (51 degrees north), I arrive
precisely 51 degrees south, in the wilds of
Chile’s grassland, glaciers, lakes and
mountains. On the other side of the
world, there is isolation – and plenty of
weather (as they say, “four seasons in one
day”).
Yet I am not without considerable com-
fort. The Explora Patagonia lodge is the
only luxury accommodation here in the
Torres del Paine National Park. All three
Explora lodges – Patagonia, Atacama and
Rapa Nui (or Easter Island, the outpost, in
the Pacific) – have been designed by the
Chilean architect José Cruz Ovalle, and
guests can expect spacious rooms, spectac-
ular views, gourmet dining, an open bar,
UP TO
in is something akin to a good stroll in
North Wales in March. In the first hour *
alone we experience 40 different kinds of PLUS UP
TO AN EXTRA £300
Above: Chile’s grass- frozen rain, grouped broadly into “sleet” PER COUPLE
lands, glaciers, lakes (various lump sizes), “snow” (building up
and mountains are to a blizzard), and “hail” (some as large as
located at 51 degrees small stones). From the shelter of the
south. beech trees of the forest, we emerge into
fierce winds roaring across an exposed
rocky outcrop for a first glimpse of Grey
Glacier. The melting wall of ice is star-
tlingly blue, and great hulking slabs crack
away so that the lake is dotted with these REGIONAL
icebergs. Down on the foreshore, Jose, our CONNECTING
guide, produces a flask and pours a cap- FLIGHTS
ful of Baileys for each guest. Glacier ice is FROM JUST
£49
†
added, ice that is tens of thousands of
years old. It’s a very fine Baileys.
After lunch we board a small cruise
ship that sails close to the glacier wall
and its imposing ice sheet. We see how
the earth’s crust has buckled and twisted
millions of years ago, contorted by seis- Sandals Royal Caribbean Resort & Private Island, Jamaica
mic shifts that also created the iconic
horns of the granite Torres del Paine. On
board I’m surprised to be greeted by a WINTER PRICE FREEZE. TRAVEL AT 2010 PRICES!^
large group of French tourists, a group I
had met only days before, 4,170km north, SAINT LUCIA SAINT LUCIA BAHAMAS
CONTINUED ON PAGE 26

Where to stay in Santiago

Santiago is the transport hub,
making air connections to Calama
airport in the north for Atacama,
and Punta Arenas in the south for
Patagonia. These two hotels offer
different experiences in different
neighbourhoods, and both have a
cool design aesthetic, an outdoor
pool and patio and great eats.
The Aubrey: This perfectly judged
boutique hotel – a first for
Santiago – sits in the heart of the
artists' quarter of Bellavista, with-
in walking distance of the capital’s
downtown. The area is a bohemian
hotspot with unspoilt low-rise
1920s and 1930s shuttered build-
ings now bars and restaurants that
invite you to drink and dine with
the locals. The Aubrey was origi-
nally a 1927 villa that has been
stylishly and carefully renovated.
Set in its own grounds with a ver-
dant hillside behind, it has 15 indi-
vidually decorated rooms, making
use of the owner’s eclectic
antiques collection mixed with
contemporary pieces.
The staff are warm and attentive
and its Italian restaurant Pasta e
Vino has a reputation that extends
well beyond Santiago.
www.theaubrey.com
W Santiago: Since November
2009, the W Santiago has brought
this US brand's urban cool to the
smart district of Las Condes. With
interior design by Tony Chi, the
196-room tower is exceptionally
spacious. The triple-height recep-
tion floor with the W lounge, wi-fi
library, restaurants and bars and
even a destination nightclub, is
high-design at its most globally
appealing. Rooms are dark and
moody with fabulous views of the
mountains, and service as you'd
expect with five-star luxury. Make
time for the spa and the rootop lap
pool.
www.starwoodhotels.com/whotels
Sandals Halcyon Beach Sandals La Toc Sandals Royal Bahamian
7 nights Luxury Included® 7 nights Luxury Included® 7 nights Luxury Included®
25 April - 28 June 2011 25 April - 28 June 2011 25 April - 28 June 2011
WAS £1873 NOW fr. £1399 WAS £2016 NOW fr. £1499 WAS £2103 NOW fr. £1659
SAVE £474 p.p. SAVE £517 p.p. SAVE £444 p.p.
ANTIGUA JAMAICA JAMAICA
Sandals Grande Antigua Sandals Grande Riviera Sandals Whitehouse
7 nights Luxury Included® 7 nights Luxury Included® 7 nights Luxury Included®
01 Sept - 30 Nov 2011 25 April - 28 June 2011 25 April - 28 June 2011
WAS £1951 NOW fr. £1495 WAS £1532 NOW fr. £1199 WAS £1902 NOW fr. £1489
SAVE £456 p.p. SAVE £333 p.p. SAVE £413 p.p.
Visit www.sandals.co.uk, call 0800 742 742 or see your local travel agent
*Book by 28 February 2011 for travel up to 26 December 2011. Discount varies depending on room type booked; 25% plus £100 per
couple for all entry level rooms, 30% plus £200 per couple for all Concierge level rooms and 30% plus £300 per couple for all Butler
Service suites. Minimum stay 7 nights. Discount is off accommodation portion only. Terms & conditions and blackout dates apply. Prices
DUHSHUSHUVRQDQGDUHEDVHGRQWZRSHRSOHVKDULQJDGHOX[HURRPIRUQLJKWVLQFOXGLQJÀLJKWVZLWK%ULWLVK$LUZD\VRU9LUJLQ$WODQWLFDOO
meals, premium drinks, all land & water sports, transfers, tips & taxes. Prices are subject to availability & change without notice. Blackout
GDWHVDQGWHUPV FRQGLWLRQVDSSO\A%DVHGRQOHDGLQURRPFDWHJRU\ ÀLJKWFODVV‚%RRNE\)HEUXDU\2QO\YDOLGDWVHOHFWHG
DLUSRUWVDQGRQ%ULWLVK$LUZD\VFRQQHFWLQJÀLJKWV6HHZHEVLWHIRUPRUHGHWDLOV$%7$ $72/SURWHFWHG
 26 Lifestyle | Travel and Gadgets
CONTINUED FROM PAGE 25
in the heat and dust of the Atacama
desert. They, too, had been staying at
Explora Atacama, the lodge on the edge
of the small oasis town of San Pedro.
At 2,500m above sea level, Atacama is
the driest place on earth at this altitude.
With no light pollution and zero humid-
ity, it has some of the clearest skies any-
where in the world and is a Mecca for
stargazers (Explora has its own walk-in
observatory). In the Valley of the Moon
my guides tell me this place has had no
significant rain for 14 years. It is an
extraordinarily beautiful, tranquil, vast
landscape of azure sky above rock the
colour of sandy-pink, rose-pink, pink-pur-
ple, sandy-purple and ocre, rimmed by
volcanoes rising above 4,500m.
Sometimes they appear as pink as the
flamingos that fly above the salt flats. If
you enjoy a cloudless, hot summer’s day
all year round, Atacama will oblige.
Our Explora guide, Victor, takes me
and five of the French group mountain
biking. The guides are chosen for their
enthusiasm and bonhomie. They spend
three months being schooled by
Explora on all aspects of flora and
fauna, geography, geology, local peo-
ples and astronomy. They genuinely
love what they do and want you to
have a good time (‘I get up, the sun
shines all day,’ says Victor, ‘I go out into
the desert, I meet interesting people
and I get paid. It’s a great life’).
The stony track is wide and sandy and,
thankfully, totally flat. It’s not the hard-
est trail you can do here as there are
plenty of hilly explorations for bikers,
but it was 18km to the Laguna Piedra for
a dip. I opt to make the return by bike:
one hour and nine minutes in the mid-
day sun. Note to self: take the opportuni-
ty to pee before you set out 18km across
the desert – there are no trees.
If the bike-riding was great fun, the
horse riding was truly exceptional. The
Savoy Hotel is a unique London treat
I
T was with much trepidation that we
turned off the Strand into the short
lane towards the Savoy’s entrance,
the only road in Britain where one
drives on the right. It all looked familiar:
the landmark Art Deco sign, the shiny
Rolls-Royces, the uniformed staff. But as
soon as we climbed out of our car, to be
greeted by a courteous and seamless virtu-
al check-in, before being whisked through
spotless corridors to our suite, we realised
that the hotel’s revamp hasn’t been in
vain. We were experiencing the best of
the old Savoy experience, modernised
and upgraded for the twenty-first centu-
ry, a no-expense spared rebirth of one of
the world’s greatest hotels.
As many will know from the TV docu-
mentary, the Savoy recently reopened
after a three year, £220m renovation. Old
favourites like the American bar and the
Thames Foyer are back. Yet the atmos-
phere and character of the hotel have
drastically improved: gone are the slightly
tatty surroundings and the C-listers. It is a
near-miraculous resurrection.
The hotel’s beautifully-appointed 268
rooms and suites are divided into Art
Deco corridors and English Edwardian.
Most of the suites enjoy delightful river
views – the one we stayed in, a one-bed-
room Deluxe River Suite, was truly out-
standing. On top of all the usual modern
luxuries, it boasts an unrivalled river view
stretching from Canary Wharf to
Vauxhall. It is this unique location which
makes the Savoy so special; so go for a
river view if you possibly can. If you are
truly wealthy, the fifth floor is dedicated
to a brand new Royal Suite complete with
facilities for your own chef and dining
room. The nine new personality suites,
named after former regulars such as
Charlie Chaplin, Marlene Dietrich and
Frank Sinatra, are another, slightly more
accessible way to experience the Savoy.
The only drawbacks were some traffic
I have ridden
pristine stables on site at Atacama have
upwards of 20 horses, and the owner of
horses in Explora, Pedro Ibáñez, breeds them espe-
cially for his two mainland properties.
many This is a superb place to have a go what-
ever your level, and there are lessons if
countries you’re a total beginner or would just like
a bit more confidence. I’m lucky to have
and I can ridden many different horses in many
different countries and I can honestly say
truly say my three-hour desert exploration was
one of the best ever. My horse, Rucia, was
that this polite and responsive and we galloped
together high up amid the red dunes of
three-hour the Cordillera de la Sal with panoramic
views over the dusty, other-worldly land-
desert scape.
And I remember the intense desert
trip was the heat as I relax in one of the four outdoor
Jacuzzis in Patagonia, with a glass of
best ever sparkling wine, gazing across the green,
green earth to the icy lake and the
mountains beyond.
And that’s Explora – look-
ing outwards to the land-
scape, the possibilities of
what nature has to
offer. From barren vol-
canoes to majestic
mountains, pink
desert rock to blue
meltwater falls, dry
salt flats to wide,
open grassland. Two
magnificent destina-
tions, one vast
country.
Exsus offers an 11-night
itinerary from £5,300 per
person based on two people
travelling together and sharing a
room. This includes four nights at
A room in the Explora Atacama and four at Explora
Explora Atacama Patagonia on a full-board basis including
lodge. excursions, two nights at The Aubrey hotel,
Santiago, with breakfast; one night at the W
Santiago with breakfast; all transfers, internal
flights and international flights
(www.exsus.com/020 7337 9010).
Above: one of the
noise from the Victoria Embankment – Savoy’s suites, with its
the windows could have been thicker; outstanding river view.
and while the suites are wonderfully spa-
cious, the rooms we visited were a tad
small. However, the Savoy’s decision to
reintroduce butlers to all the suites – they
had been phased out in the miserable,
declinist 1970s – is a masterstroke. Our
own wonderful butler helped make our
stay truly magical.
Another innovation is the black and
gold Art Deco Beaufort Bar, replacing the
hotel’s original cabaret stage near the
Thames Foyer. The River Restaurant didn’t
disappoint with its relaxing Art Deco set-
ting –by summer time, you will be scram-
bling for a table with a river view.
Winston Churchill’s favourite restaurant,
the Savoy Grill, is now under the peerless
management of Gordon Ramsay. The pool
and gym have also been stylishly renovat-
ed, as have the ballroom and meeting
rooms – ideal for weddings and corporate
events. The Savoy is back – and with it, a
very special, unforgettable London
experience. By Allister Heath
Double rooms from £295 per night, suites from
£895 and the Royal Suite at £10,000. Reservations
020 7836 4343; www.fairmont.com/savoy.
CITYA.M. 7 FEBRUARY 2011
Apple should look
to Nintendo’s past
GEEK
SPEAK
Steve Dinneen
T
HOSE who say Steve Jobs’ eventual departure from Apple could start a ter-
minal decline at the company are wrong. In fact, a glance at the history of
another great innovator of the technology world, Nintendo, suggests his exit,
whenever it may be, could turn out to be its salvation.
Jobs’ strategy with Apple has been to ignore what consumers thought they
wanted and give them what they actually wanted. Focus groups, he once declared,
were what kept computers beige for so many years. Nobody thought they want-
ed a small metal box housing their entire music collection. It turns out they did.
But Jobs’ bull-headed approach to design is mirrored in his dealings with sup-
pliers and third-party developers. The philosophy goes: if you want a job, you’d bet-
ter agree with Jobs. The similarities with Nintendo at the time of
its iron grip on the gaming market in the 1980s and early 90s are
striking, although the origins of the firms could hardly be further
apart.
Nintendo was founded in 1889 as a playing card firm and
spent much of its existence selling games to the infamous Yakuza
gangsters (a story wonderfully detailed in new book Playing to
Wiin: Nintendo and the Video Game Industry’s Greatest
Comeback by Daniel Sloan).
But Nintendo, like Apple, has been dominated by a single
name – Yamauchi (albeit spread over several generations, with
the first non-family president only taking the reins in 2002).
In the 1970s Hiroshi Yamauchi – a man so power hungry that
when he took over the firm he demanded all other family mem-
bers quit the firm to leave no illusion as to who was really in
charge – decided to push Nintendo into electronic gaming.
Yamauchi, like Jobs, was notoriously stubborn, achieving
incredible (or impossible, depending which side of the divide you
were on) deals with suppliers that left them struggling to find a
margin while Nintendo amassed a vast war-chest. He also
imposed draconian rules on third-party developers, with Nintendo
fiercely guarding the software that was allowed onto its platform.
Jobs, too, closely vets what is allowed onto his machines, an
attitude that led to his famous (and very public) bust-up with
Adobe over its Flash video software. Apple has also been criticised
over the amount of revenue it siphons off from app developers,
which, at around a third, is far more than its rivals.
At Nintendo these tactics, while catapulting the firm to global
dominance during its glory years, eventually led to problems. Spats
broke out with developers who were tired of Nintendo’s “no carrot
big stick” approach to business and some even defected to rivals
(as with Square Enix taking its hugely profitable Final Fantasy fran-
chise to Sony).
This helped to give Sony a vital foothold for its PlayStation
console and cast Nintendo into the gaming wilderness for a
decade. Part of its penance involved patching up relation-
ships with the firms it had parted company with on less than amicable
terms.
Jobs’ has taken Apple to the top of the tree, creating the biggest technology
firm in the world with a veritable cult of devoted followers. But getting there and
staying there are very different things. And if the halo one day slips, Apple may
need somebody more willing to extend the proverbial olive branch than Steve
Jobs.
BUFFALO LINKSTATION PRO... £125
The LinkStation Pro is a great solution for households with large
amounts of audio and video content. It provides an external hard drive
that plugs into the back of your wireless router, broadcasting your files
all across the house. This means you can have several users accessing
the same files at the same time. It also means you can fee up hard disk
space on your laptop without having to go through the hassle of plug-
ging in an external hard disk drive (HDD). A clever app also allows you
to access and stream content through your smartphone. One drawback
is that it can’t be used as a standalone USB hard drive, meaning trans-
ferring large files directly from your PC can be time consuming.
However, it will link to existing HDD and broadcast its contents.
LG OPTIMUS 3D... £TBA
Smartphones and 3D are two of the biggest drivers in technology at the
moment and it seems LG will be the first to combine the two. It is set to
unveil its LG Optimus 3D at Mobile World Congress in Barcelona later
this month (an event I’ll be covering for City A.M.). The glasses-free
handset will also feature a 3D camera for capturing pictures of your
mates at the pub in that soon-to-be-obligatory third dimension. It will
also come with a has an HDMI output and DLNA for sharing content. If
it is anything like the 3D handheld device from Sony I had a sneak peak
of earlier this month, this should be good.
CITYA.M. 7 FEBRUARY 2011 Lifestyle | TV& Games 27

BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5 TV PICK

TERRESTRIAL
6pm BBC News
6.30pm BBC London News
7pm The One Show
7.30pm Inside Out; BBC News
8pm EastEnders
8.30pm WikiLeaks: The Secret
Story: Panorama
9pm CHOICE Outcasts
10pm BBC News
10.25pm Regional News
10.35pm A Question of Sport
11.05pm Inside Sport
11.35pm The Graham Norton Show
12.20am The Apprentice USA: The
Arrow team is split up. 1.05am The
Apprentice USA; Weatherview
1.55am Sign Zone: Ancient Worlds
2.55am Climbing Great Buildings
3.25am Save My Holiday
4.10am-6am BBC News
6pm Eggheads: Quiz show,
hosted by Jeremy Vine.
6.30pm CHOICE One Man and
His Campervan
7pm Top Gear: Three luxurious
vehicles are tested in Albania.
8pm University Challenge:
Presented by Jeremy Paxman.
8.30pm Baking Made Easy
9pm Horizon: How to Survive a
Car Crash: How scientific
developments are making the
roads safer.
10pm Episodes
10.30pm Newsnight; Weather
11.20pm Mad Men
12.10am An Island Parish
12.40am BBC News
4am-6am BBC Learning Zone
6pm London Tonight 6pm The Simpsons 6pm Home and Away
6.30pm ITV News 6.30pm Hollyoaks 6.30pm Zoo Days
7pm Emmerdale 7pm Channel 4 News 6.55pm Meals in Moments
7.30pm Coronation Street: 7.55pm 4thought.tv 7pm Five News at 7
Tracy finds out about Leanne’s 8pm Dispatches: Tabloids’ Dirty 7.30pm How Do They Do It?
affair with Nick. Secrets: Documentary charting Five News Update
8pm The Lakes the unfolding events in the 8pm Emergency Bikers; Five
8.30pm Coronation Street phone hacking scandal. News at 9
9pm The Biggest Loser 9pm One Born Every Minute 9pm Royal Navy Caribbean
10pm ITV News at Ten 10pm CHOICE Alan Carr: Patrol
10.30pm London News Chatty Man 10pm FILM Starship Troopers OUTCASTS
10.35pm Total Emergency 11.05pm The Joy of Teen Sex BBC1, 9PM
3: Marauder: Sci-fi sequel, with
11.35pm That Sunday Night 12.10am Premier League Poker Casper Van Dien. 2008. New sci-fi drama series, starring
Ashley Walters and Hermione Norris.
Show 1.10am Mosley 2.05am The Genius 12.10am America’s Toughest
12.05am Grimefighters of British Art 3am Titanic: The Prisons 1.10am SuperCasino A diverse group of individuals forges a
12.30am The Zone; ITV News Mission 3.55am Dispatches: 4.05am The FBI Files 4.55am new beginning on another planet.
Headlines Tabloids’ Dirty Secrets 4.50am ER Rough Guide to Bang for Your
2.30am The Jeremy Kyle Show 5.35am-6.05am Wogan’s Perfect Buck 5.10am Wildlife SOS
3.25am-5.30am ITV Nightscreen Recall: Hosted by Terry Wogan. 5.35am-6am House Doctor

SKY SPORTS 1 11pm WWE: Late Night – SKY LIVING 11.05pm Skins 12.10am 4.40am Nasa’s Greatest
SATELLITE & CABLE

6.30pm The Sky Sports Years
7.30pm Live Johnstone’s Paint
Trophy Football 10pm The Sky
Sports Years 11pm Premier
League Review 12am
Netbusters 12.30am
Johnstone’s Paint Trophy
Football 2am FIFA Futbol
Mundial 2.30am Sports
Unlimited 3.30am Watersports
World 4.30am Max Power
5.30am-6am FIFA Futbol
Mundial
SKY SPORTS 2
8pm The Ashes – Victory Down
Under 10pm Soccer AM: The
Best Bits 11pm Bass Fishing
12am The Ashes – Victory
Down Under 2am Extreme Carp
2.30am Bass Fishing 3.30am-
4.30am Show Jumping
SKY SPORTS 3
7pm Show Jumping 8pm
Super Bowl XLV 10pm WWE:
Late Night – Bottom Line
Afterburn 12am WWE NXT
1am WWE Vintage Collection
2am-4.15am Live WWE:
Late Night – Raw
BRITISH EUROSPORT
6.45pm Cycling 7.45pm
Strongest Man 8.45pm
Skeleton 9.15pm Bobsleigh
10.45pm Eurogoals
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COFFEE BREAK
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk

QUICK CROSSWORD
   

SUDOKU KAKURO
11 40 11 29 19 27 4 11 
35 10
3   
45
Place the numbers from 1 to 9 in each empty cell so that each 
row, each column and each 3x3 block contains all the numbers Fill the grid so that each block 5 26
8 36 15
from 1 to 9 to solve this tricky Sudoku puzzle. adds up to the total in the box 12 6
 
above or to the left of it. 7 8
You can only use the digits 1-9 14 4 12
  and you must not use the
23 13 22
45  
same digit twice in a block.
    The same digit may occur 17 13 6
19 10 30
    more than once in a row or
column, but it must be in a
10
8 18
21
  
28 17
  separate block.
5 16 5 
45
     11 16
 

  ACROSS DOWN
1 Crouch, bow (5) 1 Group of many
   
    WORDWHEEL I T
4
6
7
Close-fitting (5)
Chess piece (4)
Pale (5)
insects (5)
2 Being in force (9)
3 Metal cooking vessel (3)
Using only the letters in the Wordwheel, you have
  ten minutes to find as many words as possible,
O D 8 Russian rulers (5) 4 Yellow-coloured
11 Psychological state explosive compound
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters N characterised (inits) (3)
5 Vainglorious,
LAST ISSUE’S or more, all must contain the central letter and
letters can only be used once in every word. There
N A by delusions of
grandeur (11) extravagant or

SOLUTIONS KAKURO is at least one nine-letter word in the wheel.

M E
13 Acquaint, make
conversant with (11)
melodramatic
conduct (7)
9 Way of access (upward
QUICK CROSSWORD 3 1 9 8 6 1 8
15 Recipient of

P A N E L B L I S S
1 2 5 7 2 8 6 9 SUDOKU         
17
money (5)
Computer instruction
and downward)
consisting of a set
5 6 9 8 1 9 3
E R A N E          of steps (9)
A C E R S L A V E
2 4 3 1 6 4 2 1 that results in a series
C P A I N S M D 8 7 9 5 9 7
        
of instructions (5) 10 Acute abdominal
         pain (5)
E D I T E P O X Y 8 5 6 2 7 1 9 4 3 18 In the way
        
C U
S P U M
R A T
E
O R
T A R N
9
5
1
2 1
3 5 4 6
8 6 7 4 9
WORDWHEEL          indicated (4) 12 Issue (7)
14 Hard black wood (5)
I R C A R A T A
8 7 9 3 2 1 6 The nine-letter word was          19 Army doctor (5)
G E E S E B A C K
1 3 2 8 9 7 2 7          20 Make do (3,2) 16 And so forth (abbr) (3)
H A S L E
T U N I S B E A R D 4 9 3 1 2 3 8
ESTRANGED          17 Drinking vessel (3)
 Sport
28 CITYA.M. 7 FEBRUARY 2011

Results
=FFK98CC

8kk1*)#0).
98I:C8PJGI<D@<IC<8>L<
:_\cj\X%%%%%%%%%%%%%%%%%%'  ' C`m\igffc%%%%%%%%%%%%%%%%%%%'  (
8kk1+(#/)0 D\`i\c\j-0
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Q`^`Z-,
Worries mount for Strauss
▲

  G N ; C = 8 >; Gkj CRICKET

DXeLk[%%%%%%%%%%%%%%%%%%%%%%%%%), (, 0 ( ,, )+ *( ,+
BY TOM CLARKE Strauss was out
8ij\eXc%%%%%%%%%%%%%%%%%%%%%%%%%%%%), (, , , ,+ ). ). ,' for a duck as
DXe:`kp%%%%%%%%%%%%%%%%%%%%%%%%%)- (+ . , +) )) )' +0
:_\cj\X%%%%%%%%%%%%%%%%%%%%%%%%%%%%), (* , . +- )) )+ ++ ENGLAND captain Andrew Strauss England lost the
Kfkk\e_Xd%%%%%%%%%%%%%%%%%%%%%), () / , *, ). / ++ admits he is facing some tough selec- last ODI in Perth
C`m\igffc%%%%%%%%%%%%%%%%%%%%%%%%)- (( , (' *+ *( * */ tion decisions this week as poor form
Jle[\icXe[%%%%%%%%%%%%%%%%%%%)- 0 (' . *) *( ( *. and injuries continue to plague his Picture: PA
9fckfe%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%)- / 0 0 *- *. $( **
Jkfb\%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%), (' * () *( *) $( ** side’s preparations for the 2011
E\nZXjkc\%%%%%%%%%%%%%%%%%%%%%%), / . (' +' */ ) *( Cricket World Cup.
9cXZbYlie%%%%%%%%%%%%%%%%%%%%%%)- 0 + (* *+ +) $/ *( Eoin Morgan was missing with a
=lc_Xd%%%%%%%%%%%%%%%%%%%%%%%%%%%%%)- - () / )/ )/ ' *' broken finger as England’s dismal
<m\ikfe%%%%%%%%%%%%%%%%%%%%%%%%%%%), - () . ** *+ $( *'
8jkfeM`ccX%%%%%%%%%%%%%%%%%%%%%)- . / (( *' +, $(, )0 one-day international series with
9cXZbgffc%%%%%%%%%%%%%%%%%%%%%%%), / + (* */ +0 $(( )/ Australia ended with yet another
9`id`e^_d%%%%%%%%%%%%%%%%%%%%)+ , () . )+ ** $0 ). defeat. The tourists lost by 57 runs as
N\jk9ifd%%%%%%%%%%%%%%%%%%%%), . , (* *( +/ $(. )- Australia sealed a 6-1 series win in
N`^Xe%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%)- , (( (' )- ++ $(/ )- Perth.
Nfcm\j%%%%%%%%%%%%%%%%%%%%%%%%%%%%%), . * (, )- +* $(. )+
N\jk?Xd%%%%%%%%%%%%%%%%%%%%%)- , 0 () ). +, $(/ )+ Batsman Morgan could now miss
the World Cup as he returned home
:I@:B<K to see a specialist about a fracture in
J<M<EK?FE<;8P@EK<IE8K@FE8C18ljkiXc`Xm
<e^cXe[G\ik_ 28ljkiXc`X).0$.8:Mf^\j/'ef#;A the middle finger of his left hand.
?ljj\p-' m<e^cXe[)))D?PXi[p-'ef %8ljkiXc`X There was some good news on the
Y\Xk<e^cXe[Yp,.ilej% injury front however as Tim Bresnan
K?@I;FE<;8P@EK<IE8K@FE8C1Ji`CXebXmN\jk confirmed he would be fit for the
@e[`\j:fcfdYf 2Ji`CXebX)..$0B:JXe^XbbXiX.,#JA tournament, which starts on 19
9\ee+$*/ mN\jk@e[`\j),(;D;D9iXmf.0#98N
D\e[`j+$+- %Ji`CXebXY\XkN\jk@e[`\jYp)-ilej% February. The bowler had missed
KFLID8K:?1<e^cXe[C`fejmC\\nXi[@jcXe[jJkB`kkj 2 most of the series with Australia with
<e^cXe[C`fej,,*$-[\Z%A:?`c[i\k_(+0#:B`\jn\kk\i a calf injury.
((-ef#AN8KXpcfi0-#8Cpk_,,#A8I?Xii`j,)ef m Fellow bowlers Graeme Swann,
C\\nXi[@jcXe[j(+/$)+.%'fm\ij %
Ajmal Shahzad and Chris Tremlett
>FC= also missed much of the series and
<LIFG<8EKFLI:FDD<I:@8C98EBH8K8I now face a battle to be fit for the
D8JK<IJ;f_X>:#;f_X#HXkXi Ç=`eXcie[>Yi@ic World Cup.
lec\jjjkXk\[#gXi.) 1).+K_fdXj9afie;\e .+-,--
-0%)./8cmXifHl`ifjJgX .,-0---/%).0DXiblj9i`\i Strauss conceded that to lose
8lk .(---0.*#IX]X\c:XYi\iX9\ccfJgX ..-/---/% Morgan would be a big blow with just
)/';Xm`[?fn\cc.,-0-/-/%)/)IfY\ikBXicjjfeJn\  over two weeks to go until England’s
.'-0-0.+#K_fdXj8`b\eIjX .(-0-0.*#Jfi\e first group game against the
?Xej\e;\e .+.(-/-0%)/*I`Z_Xi[=`eZ_.'-0.(.*#
J\i^`f>XiZ`XJgX .*.*-0-/#M`Zkfi;lYl`jjfe=iX .+ Netherlands.
-/.(.'%)/+;Xm`[;ipj[Xc\.(.(.).'#Af_eGXiip.- “It’s a big loss for us potentially,”
.'.(-.#Jk\g_\e>XccXZ_\i.).*-0.'#Fc`m\iN`cjfe.+ Strauss said. “He is important in Morgan’s absence was felt in this lat- half-centuries from Adam Voges and second ball duck, insisted that his
-0.(.'#DXib=fjk\i.*.(-/.)#;Xii\e:cXib\./-0-0 those conditions as well, being able to est defeat as England’s batsmen once David Hussey, and despite late resist- side remained upbeat about their
-/#9iX[c\p;i\[^\.).(.)-0% clear the ropes in the manner he again crumbled, failing for the fifth ance from Michael Yardy (60no) chances at the World Cup. He said:
does. If he isn’t available someone is time this series to bat their overs. England were skittled for 222. “We are still positive and confident
email sport@cityam.com going to have to fill those shoes.” Australia set England 280, thanks to Strauss, who was dismissed for a we can do well.”

Where horses
Spot-fixing bans will help ensure
and hearts race World Cup is clean, says Lorgat
plan to appeal but Lorgat, the chief
▲

CRICKET
BY FRANK DALLERES
WORLD cricket chief Haroon Lorgat
has hailed the punishments handed
March out to the three Pakistan players
2011 found guilty of spot-fixing as proof
executive of the International Cricket
Council, says the punishments have
sent out a strong message ahead of
the World Cup, which starts this
month in the subcontinent.
“It’s important we have succeeded

THE
the game is serious about rooting out in the conviction,” he said. “It’s a mes-
corruption. sage we are sending out that we will

FESTIVA
Salman Butt, Mohammad Asif and not tolerate any corruption. We want
Mohammad Amir were banned on this message to be crystal clear. We

L
Saturday for between five and 10 will do everything in our power for
years over allegations they deliberate- the World Cup to be corruption-free
Tuesday ly bowled no-balls during the fourth and we are confident that measures
Wednes1 5th Butt has been handed a 10-year ban Picture: PA Test against England last summer. All are in place to achieve that.”
day 16th
Thursda
y 17
Friday 1 th
8 th Kaymer flunks chance to usurp SPORT | IN BRIEF

Westwood as Bjorn wins in Qatar Khan to fight McCloskey

BOXING: England’s Amir
Irish Hennessy delayed
HORSE RACING: The Irish
Khan will defend his WBA Hennessy Gold Cup will take
BOOK NOW. TICKETS FROM £22 carded a three-under-par 69 on the light-welterweight title place this Saturday after the-
▲

GOLF
BY TOM CLARKE
0844 579 3003 (24hr) ENGLAND’S Lee Westwood retained
top spot in the world rankings as
Germany’s Martyn Kaymer failed to
www.cheltenham.co.uk capitalise on his chance to depose
him at the Qatar Masters.
Kaymer, 26, needed a top-two finish
to become No1 but could only man-
age a tie for 28th place as Westwood
failed to make the cut.
The tournament was won by Ryder
Cup vice-captain Thomas Bjorn who
final day to finish 14 under par and
seal his 11th European Tour Title.
The Dane, 39, led by one overnight
and parred 14 holes before birdies at
15, 16 and 18 secured victory.
“It’s a big win for me and hopefully
it can push me on to bigger things
now,” Bjorn said.
Kaymer, who finished on two
under par after a final-round 71, said:
“I was in a position to finish in the
top 10 I thought but the greens are
not my friends here in Qatar.”
against Northern Ireland’s
European champion Paul
McCloskey in the spring after
an agreement was finally
reached between the two
camps. Negotiations had bro-
ken down some weeks ago
but the fight is now scheduled
to take place at Manchester’s
MEN Arena on 16 April.
Bolton fighter Khan said: “I
am delighted that this fight
has finally been put together.”
weekend’s meeting at
Leopardstown was post-
poned. Several Cheltenham
Festival hopefuls, including
Joncol, were set to feature
but heavy rain meant the card
was called off following
inspection. Course manager
Tom Burke said: “In total
we’ve had 17mm [of rain]
since Saturday afternoon,
which is more than we were
able to cope with.”
CITYA.M. 7 FEBRUARY 2011 Sport 29

Wood can be Robinson wants

ruthless Scots
our new Hill,

▲
RUGBY UNION

says Tindall
SCOTLAND head coach Andy
Robinson has demanded his team be
more ruthless against Wales next
weekend after losing their RBS 6
Nations opener 34-21 in France.
“I was delighted with the attitude
shown and the way we went out to
play, but we’re here to win Tests and
we’ve got to have a ruthless edge
a massive step against Wales,” said about the way that we play,” he said.
RBS Tindall, who skippered the side for “For France to score four tries from
6 NATIONS the first time in the absence of the
injured Lewis Moody.
our turnovers is not good enough.”

BY FRANK DALLERES “I think he is definitely in that

ENGLAND captain Mike Tindall has
hailed Tom Wood as the heir to World
Cup-winner Richard Hill after the
flanker enjoyed a dominant debut in
Friday’s 26-19 victory over Wales.
Wood, 24, was not included in the
initial 33-man squad for the RBS 6
Nations but was thrust straight into
O’Gara relishing
Richard Hill mould. Richard went
under the radar. You have to look at
film to see how good he was but I
thought Tom was outstanding today –
he was everywhere.”
Wood’s assured international bow
will boost his chances of holding onto
Sexton rivalry
his place in the side for Saturday,
when Italy visit Twickenham.

the starting XV for a full-blooded
opening fixture in Cardiff after a
spate of injuries to the forwards.
The Northampton Saints star, who
can play on either flank, rose to the
occasion on Friday night and out-
shone more experienced colleagues,
prompting Tindall to compare him to
former British and Irish Lion Hill.
“I thought he was outstanding.
Everywhere I seemed to look there he
was. You talk about players putting
their hand up and taking chances
when they come along – well he took
Hendre Fourie could be fit enough
to rival him for selection, but will
have to convince Martin Johnson to
drop a player who impressed the
England management.
“Tom walked out to the bright
lights, the male voice choir, the band
and the goat,” said Johnson.
“They pushed us off our side of the
field. But when you have got the ball,
you have to be accurate and that is
what he did every time. That is his lit-
tle part of a big thing that means win-
ning the game.”
▲
RUGBY UNION
IRELAND fly-half Ronan O’Gara
insists the rivalry between him and
Jonathan Sexton for the No10 shirt is
good for the side, after coming off the
bench to kick the winning drop goal
in Saturday’s 13-11 RBS 6 Nations tri-
umph in Italy.
“Jonny played well, but I got backed
to come on and try to win the game,”
said O’Gara. “It’s important to have
two fellas fighting it out because we
Wood made his Test debut in Friday night’s 26-19 win Picture: GETTY can offer a lot going forward.”

| PROMOTION

WIN A PAIR OF TICKETS TO

ENGLAND V ITALY
The RBS 6 Nations features the very top echelons of rugby talent WHEN WAS ENGLAND’S
currently playing professionally in the Northern Hemisphere, and this LAST GRAND SLAM WIN
year’s Championship will be as exciting and toughly contested as ever.
IN THE RBS 6 NATIONS
But, as rugby fans will know, almost every player on the CHAMPIONSHIP?
international stage started at a local club. Championship sponsor RBS
is recognising this by helping local communities to make their rugby
club a better place. RBS RugbyForce helps clubs to improve their
facilities through on-line tools, practical advice and a few incentives.
a. 2001
To further recognise how important communities and fans are b. 2002
to the success of the international game, RBS has teamed up with
City A.M. to offer a pair of tickets to England v Italy at Twickenham c. 2003
on Saturday 12th February.
Simply send your entry and
For your chance to win, all you have to do is answer the following contact number to
question correctly: lucky@cityam.com

To register your rugby club for the RBS RugbyForce Weekend on 11 & 12 June, visit www.rbs.co.uk/rugbyforce.
Tickets are subject to RFU terms and conditions

Terms & Conditions: The prize is: 1 pair of tickets to England v Italy at Twickenham on Saturday 12th February 2011. The promoter is RBS and the promoter reserves the right to change the prize
to one of equivalent or greater value without notice. Entry into the promotion is free and no purchase is necessary. Only one entry per reader is permitted. Entrants must be aged 18 years and over.
Travel expenses and accommodation are not included. The closing date is Monday 7th February 2011 at 11:59pm. The winner will be drawn at random from all correct entries and will be notified
on Tuesday 8th February 2011. By entering the promotion you agree to receive further information and similar promotions from City A.M. If you do not wish to receive this please add ‘No’ after
your answer. The winners, by accepting the prize, agree to publicity if required. The Editor’s decision is final.
 30 Sport
SPORT
RUGBY
TINDALL
HAILS
WOOD
P29
Barton sticks knife
into ‘stupid’ Diaby
▲
FOOTBALL
BY FRANK DALLERES
NEWCASTLE midfielder Joey Barton
has taunted Arsenal by branding
Abou Diaby “stupid” for earning a red
card in Saturday’s historic 4-4 draw.
The Gunners spectacularly capitu-
lated, becoming the first team in the
Premier League ever to squander a
four-goal lead, after Diaby was sent
off for lashing out at Barton fol-
lowing a challenge.
Title-chasing Arsenal’s collapse
was reminiscent of their 2-2 draw at
Birmingham in February 2008,
when they conceded a late
equaliser and went on to surren-
der in the race for top spot.
And Barton has rubbed salt
in the wound by deriding
Diaby and suggest-
ing the north
Londoners should try
other, less physical sports.
“I don’t understand Diaby’s
reaction. I went in one-footed,
cleanly took the ball and my
momentum carried me into
him,” said the controversial for-
mer Manchester City player
(right), who scored two penal-
ties. “I think it was stupid from
him. They were 4-0 up, there
was no need for him to
Liverpool
ruin Torres’
Blues bow
CHELSEA
LIVERPOOL
0
1
▲
FOOTBALL
BY JAMES GOLDMAN, STAMFORD BRIDGE
CHELSEA manager Carlo Ancelotti
defended Fernando Torres and insist-
ed the Spaniard needs time to settle
into his new surroundings after his
miserable debut ended in
defeat against his former
club.
The Spaniard, who
signed for a British record
£50m a week ago, was sub-
stituted after 65 minutes
and could only watch on
from the bench when, two
minutes later, Raul Meireles
crashed home the winning goal.
Ancelotti paired Torres along-
side Didier Drogba, with Nicolas
Anelka operating from a deeper posi-
tion and he intends to persevere
with that system despite it flopping
on its debut outing.
He said: “Torres has to try in the
react the way he reacted. For me, it
wasn’t an issue. If the Arsenal players
don’t like being tackled, they should
go and play basketball or netball or
one of the other games.”
Arsenal manager Arsene Wenger
said Barton was “very lucky to stay on
the pitch” for the challenge, and put
Diaby’s reaction down to repeated
fouls and mental scars from previous
career-threatening injuries.
Despite only drawing at St
James’ Park, Wenger’s side gained
ground on United, after their
shock defeat at Wolves, and
Chelsea, who were beaten
at home by Liverpool yes-
terday.
Of further concern to
Wenger is an injury to
defender Johan
Djourou, who hobbled
off at the start of the
second half. The
Switzerland centre-back,
whose Arsenal career has
been riven by a series of fit-
ness setbacks, is due to have a
scan on his knee today.
Wenger is already without one
first choice defender in Thomas
Vermaelen, and with the Belgian still
more than a month away from
returning, can ill afford to lose the in-
form Djourou.
training sessions to com-
bine well with the other
strikers but this is nor-
mal after one game.
“We played a fan-
tastic game with this
shape at Sunderland
and we wanted to
repeat it. The problem
was not these players
together, they have a lot of
quality.”
Liverpool manager Kenny
Dalglish counteracted Ancelotti’s
new-look forward line by picking
three centre-halves, Martin Skrtel,
Daniel Agger and Jamie Carragher,
all of whom were excellent.
Zigic’s goal was his first in the league since October
Zigic gives Grant a
miserable birthday
WEST HAM
BIRMINGHAM
▲
FOOTBALL
BY TOM CLARKE
WEST HAM boss Avram Grant admits
that defeat to relegation rivals
Birmingham ruined his birthday.
Grant, who turned 56 yesterday,
watched his side lose 1-0 at Upton
Park as a 65th minute goal from
Nikola Zigic gave Birmingham a vital
three points. “How can I celebrate?”
But this was far from a backs-to-
the-wall display. Liverpool kept pos-
session well, broke intelligently
throughout and were worth a lead
well before Meireles plundered his
fourth goal in five games.
Steven Gerrard’s cross to the
near post ought to have been collect-
ed by Petr Cech, but Dirk Kuyt’s will-
ingness to chase even the most
hopeless looking of causes resulted
in Cech taking his eye off the ball,
and Meireles arrived right on cue to
lash home left-footed.
Defeat was all the more difficult
to take for Ancelotti after
Manchester United and Arsenal had
both dropped points on Saturday,
Picture: ACTION IMAGES
Grant said after the match. “We did-
0 n’t score and didn’t win. It is not a
happy birthday but it is not me that is
important it is the team.”
1 The game itself was a scrappy affair
with West Ham looking more threat-
ening in the first period. But the
introduction of midfielder Sebastian
Larsson proved crucial for the visitors
as his free-kick was headed home by
the towering Zigic.
The defeat leaves West Ham bottom
ahead of next week’s clash with fel-
low strugglers West Brom.
Birmingham climbed out of the rele-
gation zone to 16th place, with just
seven points now separating the bot-
tom 11 teams in the Premier League.
CITYA.M. 7 FEBRUARY 2011
but the Italian insists his side are
still in with a chance of defending
their title.
He said: “We are disappointed
because we had a great opportunity
to close the gap and now there is the
same distance, but we have to keep
going, we have less possibility to
close the gap but we have to try
again.
“I think the Premier League is
very difficult to play every game, so
it can happen that Manchester
United can lose again.
“Every team can lose, it is a fan-
tastic league with lots of balance,
and now the games are very impor-
tant for everyone.”
Di Matteo
stunned at
his sacking
▲
FOOTBALL
BY JAMES GOLDMAN
ROBERTO DI MATTEO admitted he
was “surprised and disappointed”
after being sacked by West Bromwich
Albion.
The former Chelsea midfielder was
placed on gardening leave yesterday
with the Baggies outside the relega-
tion zone on goal difference.
A statement released by Di Matteo
through the League Manager’s
Association read: “I was extremely
surprised and disappointed to be
relieved of my duties today.
“Winning promotion to the
Barclays Premier League with West
Brom last season was without doubt
one of the highlights of my career
and certainly my managerial career.”
The LMA themselves hit out at the
sacking, with chief executive officer
Richard Bevan saying: “Roberto repre-
sents yet another victim of the “hire
and fire” mentality that pervades in
our game. The club has big games
ahead, and you have to question the
decision to sack the manager.”
Two former Newcastle managers,
Sam Allardyce and Chris Hughton,
are among the favourites to suc-
ceed Di Matteo.
CITYA.M. 7 FEBRUARY 2011 Sport 31

Kubica’s F1 career in
TORRID DEBUT FOR FERNANDO

The travelling Liverpool fans went to great

doubt after accident
lengths to ensure their former idol knew
just how far he’d slipped in their estimation. l Renault driver breaks
One fan wore a Liverpool top with ‘Traitor’
printed on the back. his hand, arm and leg in
rallying crash in Italy
l Surgeons considered
amputating right hand
▲ FORMULA ONE
BY JAMES GOLDMAN
RENAULT driver Robert Kubica’s
Despite a debut that could at best be Formula One career remains in the
described as uninspiring, Torres had balance after he underwent surgery
on the serious fractures to his right
Chelsea’s clearest opportunity of the game hand, arm and leg last night.
midway through the first-half, but Jamie The 26-year-old Pole suffered the
Carragher’s block scuppered the Spaniard. horrific injuries in the Ronde di
Andora Rally in Italy when he collid-
ed with a wall at high speed in a
Meireles has now scored Skoda Fabia.
four goals in six games A return in time for the start of
under Dalglish the new season, which commences
on 13 March in Bahrain, seems out of
Picture: ACTION IMAGES the question, while the severity of Kubica was taking
the injures – surgeons were said to part in the Ronde di
be considering amputating his hand Andora Rally
TOP FIVE – cast doubt over his ability to com-
pete in the sport again. Pictures: AP
TEAM PLD W D L F A PTS
Kubica’s agent, Danielle Morelli, is
Man United 25 15 9 1 55 24 54 The animosity between the rival fans confident, however, that the man
Arsenal 25 15 5 5 54 27 50 spilled onto the pitch shortly before the who finished eighth in last season’s
Man City 26 14 7 5 42 22 49 drivers’ championship will make a
break when Branislav Ivanovic and Petr full recovery.
Chelsea 25 13 5 7 46 22 44 Cech got in a tangle. The usually mild “The surgeons are trying to restore
Spurs 25 12 8 5 35 27 44 manored goalkeeper was far from amused. the functions of his right hand,” he
said. “They have already revascular-
ized the limb and repaired the bone
structure.
“Now they have to think about the
FOOTBALL | IN BRIEF muscular functions but Robert has
strong character and he will make no stranger to high-speed collisions Bruno Senna – who raced for
it.” having undergone surgery on his left Hispania last season – and
Gerrard out of England match fifth round at Ibrox. Rangers lead 2-1 at The crash is reported to have taken arm after a Formula Three crash in Frenchman Romain Grosjean, who
LIVERPOOL captain Steven Gerrard will half-time in a heated affair but an place 4.6km into the stage when 2003, while he also missed the 2007 drove for Renault as a replacement
not play in England’s friendly in Denmark equaliser from Celtic captain Scott Kubica’s car left the road and collid- United States Grand Prix after a spec- for Nelson Piquet Jr in 2009.
on Wednesday. His groin injury, and the Brown ensured a replay. ed with the wall of a church. tacular crash in Canada. Kubica’s F1 colleagues,meanwhile,
absence of Rio Ferdinand, means England Kubica is said to have remained Kubica had been due to lead the have been quick to send messages of
will have to name a new captain. Van der Vaart suffers calf injury conscious during a lengthy opera- Renault team alongside Russian support.
TOTTENHAM’S Rafael van der Vaart has tion to cut him free from the car Vitaly Petrov, who has a long-term Britain’s Jenson Button, who drives
Old Firm cup clash ends in draw pulled out of Holland’s friendly against before he was airlifted to a hospital contract after signing for the 2011 for McLaren, said on his Twitter page:
RANGERS and Celtic both had men sent Austria in midweek. He hurt his calf in in Genoa. and 2012 season during the winter. “Shocking news about Robert Kubica.
off as they drew 2-2 in the Scottish Cup the 2-1 win over Bolton on Saturday. The former BMW Sauber driver is The reserve drivers for 2011 include I wish him a speedy recovery.”
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