RESOLUTION IS IN talks to buy Abbey National's life insurance business in a deal that could be worth up to £4bn, reports The Guardian .
According to the paper, the talks are at an early stage but if the move goes ahead, it would see Resolution virtually double in size and propel the company into the FTSE 100 index.
Negotiations between Abbey's owner, Banco Santander Central Hispano, and Resolution are on an exclusive basis, although Hugh Osmond's privately owned Pearl Group made it clear last night that it wanted a chance to launch its own offer.
A Pearl spokesman is quoted as saying: "We have not been invited to participate in the sale process but, if invited, we would be very keen to do so." Pearl is understood to be lobbying Abbey's Spanish owners for a seat at the negotiating table.
Abbey's life business has £29bn of funds and an "embedded value" of £3.7bn. It employs around 2,300. Resolution was created through the £1.8bn merger of Resolution Life and Britannic last year and is the largest consolidator of closed life funds.
It said yesterday that in any transaction its commitment to "a hurdle rate" of a 12% internal rate of return "will remain paramount". Any deal will be funded by a mix of equity and debt.
BARCLAYS WILL BE forced to hand over details of thousands of its customers’ offshore accounts after the Revenue and Customs won what it called a “landmark” legal battle that it believes could yield £1.5bn of unpaid tax, reports The Financial Times.
Officials will now search the records for information on UK-domiciled individuals who have not declared income on money kept in offshore centres such as the Channel Islands. The Revenue described the ruling as “a landmark decision” and said the expected yield was bigger than for previous cases.
The use of offshore accounts is of growing concern to tax authorities. Their popularity has increased with the growing availability of credit and debit cards. Although it has been legal to hold money offshore since the relaxation of exchange controls in 1979, it is illegal to conceal the interest earned.
John Avery Jones, special commissioner, said he had sided with the Revenue because “in my view, the information that it has already obtained raises serious questions that merit investigation and cannot be investigated by any other means”.
Although Barclays was the financial institution involved in this case, the Revenue is now expected to seek similar rulings from other banks. Accountants said the ruling would add a powerful weapon to the Revenue’s armoury in clamping down on tax evasion in offshore savings accounts.
Earlier this year, following another ruling by the special commissioners, the Revenue won the power to require financial institutions to hand over customers’ credit card details to help them track down undeclared income from offshore savings accounts. This latest ruling forces financial institutions to hand over customer data held on their computer systems as well.
PROPERTY COMPANY Hammerson plans to turn itself into a Real Estate Investment Trust (REIT) if the proposed Finance Bill weaving its way through Parliament becomes law, reports The Daily Telegraph.
It is just the third publicly listed property group to state its intention to convert, following Brixton Estates and Liberty International.
Hammerson chairman John Nelson said in a statement: "If the Bill is enacted substantially in its current form, the company will elect for REIT status to take effect at the beginning of 2007. We believe the introduction of REITs will provide additional opportunities to grow the business over the next few years."
Hammerson will be required to pay a one-off entry charge of 2% of the value of its UK property assets at the end of this year. At the end of last year Hammerson's UK properties were worth £4.1bn which would give a charge of £83m.
The company will then be required to pay dividends of at least 90% of the tax exempt income. Shareholders will still be liable to pay tax on their dividends. Hammerson's net asset value of £3.1bn last December would have risen to £3.4bn had the company already had REIT status.
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