Aviva, Britain's largest insurer, today paved the way for acquisitions by scrapping its target for dividend payments and topping up its pension fund to the tune of £700m, according to The Times .
The paper says as it unveiled a near one-third increase in operating profits to more than £2.9 bn - driven by its best ever results in general insurance - Aviva said it would be upping the final dividend payment by 9% to 17.44p. The move takes the final payout to investors to 27.27p, an increase of 7.5%.
However, at the same time Aviva said it would scrap its target of increasing future dividends by 5%, in a move it said was designed to "improve flexibility while investing for future growth".
Removing its informal obligation to increase dividend payments will help Aviva increase its spare cash, which already stands at about £500m.
Richard Harvey, the chief executive, described the previous dividend target as "rigid" as he further signalled the insurer's ambitions to snap up rivals and expand its business.
The paper quotes Harvey as saying: "We are confident of delivering further growth from our businesses in 2006. We will continue to evaluate new distribution and acquisition opportunities to provide additional momentum where we can create shareholder value."
Aviva has already been closely associated with two potentially transforming deals. It is thought to have held what were eventually abortive exploratory takeover talks with its big rival in Britain the Prudential.
And it was reported to have made an unsuccessful bid approach to American insurance group AmerUs.
ELSEWHERE, THE rest of the morning’s papers are busy discussing the results of a two-year investigation by the FSA into hedge fund group GLG.
One of the City's best known but most publicity-shy hedge funds and one of its top traders have been fined a combined £1.5m following a two-year investigation by the Financial Services Authority, reports The Guardian.
The fines of £750,000 apiece have been handed to Philippe Jabre and GLG, the hedge fund group from which Mr Jabre is currently "on leave of absence". Mr Jabre has been found to have committed market abuse and the firm not to have monitored him properly.
The investigation by the City watchdog, which is keen to crack down on abuses by hedge funds, is believed to have focused on information received by Jabre about a convertible bond issue by Japan's Sumitomo Mitsui Financial.
Jabre is thought to have been sounded out about his interest in buying the bonds, as is common practice in the City, but had, unusually, traded on the information.
AND ACCORDING TO The Daily Telegraph, Philippe Jabre and GLG Partners have 28 days to appeal against a Financial Services Authority decision to fine them each £750,000 for alleged insider dealing.
The sanctions have been detailed in a confidential FSA "decision notice" to the pair and any appeal will lead to the case being reconsidered by the independent Financial Services and Markets Tribunal.
If it proceeds to the tribunal, or if the FSA is able to issue a "final notice", it will be the first time all of the details of the situation have been aired publicly.
Jabre resigned as a director of GLG Partners in January, at the same time as he took an indefinite leave of absence from the group. Sources close to the situation have said he is unlikely to return. Neither the FSA or GLG Partners would comment to the paper.
THOUSANDS OF part-time workers could be able to claim the same pension and sick pay rights as their full-time colleagues after a landmark ruling by Britain's highest court, reports The Financial Times.
The case involving an appeal to the House of Lords on behalf of 16,000 part-time firefighters was the first to consider some of the main provisions in the 2000 Part-time Workers Regulations.
Lawyers said it would have wide-ranging implications for both employers and part-time employees. The firefighters, represented by the Fire Brigades Union, had argued that retained firefighters, who are part-time workers, were being discriminated against in comparison with full-time colleagues.
They alleged, for example, the retained employees had not been allowed to the join the Firefighters Pension Scheme, and enjoyed less favourable sick pay conditions. But a group of test-cases failed to make headway at an employment tribunal.
Although it found the part-time workers were treated less favourably, it decided they were not employed under the same type of contract and did not perform work "which was the same or broadly similar".
The Employment Appeal Tribunal upheld that decision, and although the FBU made some progress in the Court of Appeal, this court also dismissed the claim that the work was "the same or broadly similar".
But yesterday, the House of Lords, by a three-to-two majority, allowed the union's appeal, saying the original tribunal had erred in the way it assessed whether the work was "the same or broadly similar" and ordered the case to go back to a tribunal for rehearing.
Lawyers told the paper guidance given by the House of Lords over what constituted "broadly similar" work, provided a "green light" for many other part-time workers, in all kinds of sectors, to bring discrimination claims.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
Partner Insight: For Blackfinch, the arrival of its IHT portfolio services was a 'natural evolution' in the group's offering and points to an established track record of returning cash to investors.
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FCA made demands last week