What it says in the papers: business pages
HERE are the main business stories from this morning's papers:
***Banks have been warned the Government will bring in legislation to force them to cut “exploitative” variable mortgage interest rates.
The head of the Central Bank, Patrick Honohan, has flatly told lenders to lower rates for 300,000 homeowners.
“Their boards and management need to recognise that charging spreads that excessively exploit the current weak competitive environment risks being counterproductive if they bring down upon themselves Government policy reactions,” Mr Honohan says in a report compiled for Finance Minister Michael Noonan.
***Eircom has rejected a €3.3bn buyout approach for the company, insisting the price didn’t reflect its true value.
The telco, controlled by a suite of global private equity groups, confirmed last night that it had received a non-binding approach for the business that gave it an enterprise value – which includes debt and equity – of between €3.2bn and €3.3bn. Eircom had just over €2.2bn of net debt at the end of 2014.
“While the bidder was very credible, the board believed that, with the business reaching an inflection point, the indicated price range undervalued the group. The matter is therefore not being progressed,” said Eircom in a statement.
***Vodafone lost 37,000 Irish mobile customers in the first three months of the year and 110,000 over the last 12 months, according to its most recent set of financial results.
However, the company, which remains Ireland’s largest mobile player with two million customers and 38pc market share here, gained 7,000 landline customers in the quarter to bring its fixed line customer base to 282,000.
While Irish revenue fell 2.6pc to €936m, Vodafone’s international group revenue posted a modest rise in its quarterly sales measurement for the first time in nearly three years.
***Dublin-based food firm Greencore, whose sales top €1.6bn, pays an effective rate of tax of just 1pc in Ireland, the Irish Times reports.
Due to historic losses incurred from a company it acquired in 2011, Greencore’s £5.5m Irish corporate tax bill for last year ended up as a tax credit of £4.2m.
According to the newspaper the firm uses “deferred tax assets” acquired through its takeover of UK rival Uniq to reduce its tax liability in Ireland.
***An advisor to the outgoing Governor of the Central Bank Patrick Honohan has said that the Irish bank guarantee was a “very costly mistake”.
Lars Frisell added that Anglo Irish Bank and Irish Nationwide should never have been included in the blanket guarantee.
Addressing an audience in Stockholm he said: “Whatever the short-term benefits of a general guarantee, the costs in terms of credit losses arguably outweigh them.”
***Distribution group DCC has agreed to buy French LPG supplier Butagaz from Shell for €464m in what will be the Irish company’s biggest ever acquisition.
Shares in London-listed DCC rose over 11pc at one point yesterday after it announced in its full year results that pre-tax profits had increased by 8.1pc to £163.3m.
Speaking to the Irish Times DCC chief executive Tommy Breen said that the company is looking at further European acquisitions.
***Shannon Airport Authority has raised concerns that a planned multi-million euro development at a nearby business park could have a negative impact on the operation of the airport, the Irish Examiner reports.
In a submissions to planners at Clare County Council the airport authorities have flagged safety concerns regarding the development of a office units with a combined floor space of almost 15,000 sq ft at the Westpark Business Centre.
The organisation is concerned that the height of the buildings, and cranes to be used during construction, could have a negative impact on safety standards at the airport.
***Shareholders at Ormonde Mining have backed plans by the Irish company that will see US private equity giant Oaktree Capital provide almost $100m (€87m) in financing to develop a Spanish tungsten mine.
The approval sees off a challenge from Canadian resources firm Almonty, which had had tabled an indicative offer to buy the Irish company for €27m in cash and stock. Almonty had been circling Ormonde for almost two years.
Almonty chief executive Lewis Black claimed that if combined, the two companies would be able to secured “tens of millions of dollars” in synergies via their mine operations in northern Spain.
***New Central Bank rules on lending will likely curb the development of a housing bubble, according to analysts.
Figures from the Banking and Payment Federation show that first time buyers are driving demand in the housing market instead of investors. First time buyer loans accounted for 54pc of all loans drawn down by home buyers in the first three months of the year.
Goodbody Stockbrokers analyst Eamonn Hughes said that the rate of increase is expected to slow as Central Bank lending restrictions come into effect later in the year.