Beaten Equitable Life looks for white knight

Equitable Life, the oldest mutual life insurance company in the world and pension scheme provider to many leading companies in the UK, put itself on the market last week after losing a court battle with some of its customers. The dispute was over the selective distribution of bonuses to policyholders due to a fall in the company’s investment performance. The landmark case threatens to have far reaching implications for the life insurance sector. The House of Lords ruled that Equitable Life acted improperly by trying to scale back the final bonuses paid to holders of certain policies – some dating back to the 1960s. The company, which is now almost certain to lose its mutual status and independence is valued at about £4.5bn and manages assets worth over £30bn.


Equitable Life believes that the cost of settling the aggrieved pensioners’ claims will amount to more than £1.5bn and as a result, it is urgently seeking a partner to inject some capital into the company. So far, the names in the frame are Standard Life and Prudential but others are likely to emerge before Equitable Life, founded in 1762, goes under the hammer. As the sale has been forced, redundancies are likely.


BT forced to talk down profits after continued business decline


BT told analysts last week that its business remains on the slippery slopes with pre-tax profits expected to fall even further. The company confirmed that as a result of changes in the way it accounts for its concert partnership with AT&T of the US, forecast profits for the year to March 2001 have been revised down to around £1.7bn. It amounts to a significant deterioration from the £4.3bn BT achieved in 1998. Many analysts are at their wits’ end with BT, frustrated with the company’s lack of progress. The latest revision is likely to prolong the difficulties experienced by the company share price. This year alone, the stock price has declined by about 40 per cent and continues to lag the sector by almost a third. BT is debt-ridden and with growing competition in both its core fixed-line and mobile businesses, the company has a difficult uphill struggle.


British retailer shares wilt as Wal-Mart turns up the heat


Britain’s retail sector is in for a hot summer and customers are likely to see prices melting in the intense heat of the competition unleashed last week by Wal-Mart, the largest retailer in the world and parent of supermarket Asda. In the firing line are retailers across the spectrum from grocers to electrical retailers. Many analysts predict that some big name retailers will develop cold feet faced with the prospects of loosing customers to Asda, which has the ability to play the Wal-Mart card and undercut competitors. Already, the pressure is beginning to show in the share prices of Sainsbury’s, Tesco, Kingfisher, Dixons, Boots, Marks & Spencer and Wickes.


Equitable Life, the oldest mutual life insurance company in the world and pension scheme provider to many leading companies in the UK, put itself on the market last week after losing a court battle with some of its customers. The dispute was over the selective distribution of bonuses to policyholders due to a fall in the company’s investment performance. The landmark case threatens to have far reaching implications for the life insurance sector. The House of Lords ruled that Equitable Life acted improperly by trying to scale back the final bonuses paid to holders of certain policies – some dating back to the 1960s. The company, which is now almost certain to lose its mutual status and independence is valued at about £4.5bn and manages assets worth over £30bn.

Equitable Life believes that the cost of settling the aggrieved pensioners’ claims will amount to more than £1.5bn and as a result, it is urgently seeking a partner to inject some capital into the company. So far, the names in the frame are Standard Life and Prudential but others are likely to emerge before Equitable Life, founded in 1762, goes under the hammer. As the sale has been forced, redundancies are likely.

BT forced to talk down profits after continued business decline

BT told analysts last week that its business remains on the slippery slopes with pre-tax profits expected to fall even further. The company confirmed that as a result of changes in the way it accounts for its concert partnership with AT&T of the US, forecast profits for the year to March 2001 have been revised down to around £1.7bn. It amounts to a significant deterioration from the £4.3bn BT achieved in 1998. Many analysts are at their wits’ end with BT, frustrated with the company’s lack of progress. The latest revision is likely to prolong the difficulties experienced by the company share price. This year alone, the stock price has declined by about 40 per cent and continues to lag the sector by almost a third. BT is debt-ridden and with growing competition in both its core fixed-line and mobile businesses, the company has a difficult uphill struggle.

British retailer shares wilt as Wal-Mart turns up the heat

Britain’s retail sector is in for a hot summer and customers are likely to see prices melting in the intense heat of the competition unleashed last week by Wal-Mart, the largest retailer in the world and parent of supermarket Asda. In the firing line are retailers across the spectrum from grocers to electrical retailers. Many analysts predict that some big name retailers will develop cold feet faced with the prospects of loosing customers to Asda, which has the ability to play the Wal-Mart card and undercut competitors. Already, the pressure is beginning to show in the share prices of Sainsbury’s, Tesco, Kingfisher, Dixons, Boots, Marks & Spencer and Wickes.

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