Tuesday's morning business news

Northern Rock's biggest shareholder on Virgin bid / People's fears over company pensions / CBI increases pressure on Brown

Newcastle-based Northern Rock’s biggest shareholder is hoping for an improved offer for the lender after querying the value of the salvage bid led by Sir Richard Branson’s Virgin Group.

Hedge fund RAB Capital - owner of a 6.7% stake  - said the proposals by the consortium named as preferred bidder to rescue the company undervalued the bank.

The consortium is planning to inject £1.3bn of funds in return for a controlling stake of at least 55%.

Part of the cash will be raised through new shares being offered at 25p each, giving Northern Rock an implied value of about £225m - a fraction of the group’s £5.2bn value seen in February.

RAB Capital chief executive Philip Richards said  events were a ``step closer“ to securing the business - but is pressing for a higher offer.

Fewer than a third of people think their company pension will provide them with an adequate income during retirement, research showed today.

Just 31% of people who are members of an occupational pension think it will provide them with a satisfactory income, with people more likely to feel this way as they get older and approach retirement, according to consultants Alexander Forbes Financial Services.

The survey also found that half of people thought their workplace pension was guaranteed, despite recent publicity about people losing some of their retirement savings when their company went bankrupt.

Seven out of 10 people said their company did not teach them anything about pensions, although 43% of companies claimed they provided pensions education.

Instead 43% of workers said they got information on their scheme through the company intranet, despite the fact that only 14% of employers said they provided information in this way.

More than three-quarters of pension savers said they preferred to have experts making investment decisions on their behalf.

The Government will come under fresh pressure today from industry leaders not to go ahead with controversial changes to business taxes after the Prime Minister said he understood companies’ concerns.

Chancellor Alistair Darling will face delegates at the national conference of the CBI, which has been critical of plans to increase capital gains tax from 10% to 18%.

Behind the scenes talks are being held between the Treasury and business leaders amid rumours that the Government will bow to pressure and look again at the planned reforms.

But Mr Darling is expected to stick to his guns in his address, with sources insisting the basic reforms are not up for negotiation.

He will also pledge to make ``tough decisions“ to sustain the UK economy and tell business leaders he was right to intervene in the Northern Rock crisis.

The FTSE-100 index at 9:15am was down 27.3 at 6153.2.

The pound at 9am was 2.0684 dollars compared to 2.0689 dollars at the previous close.

The euro at 9am was 0.7167 pounds compared to 0.7185 pounds at the previous close.


David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer