Legal & General Share News (LGEN)

The Ministry of Defence will this week award contracts worth up to £420m to Interserve to maintain four overseas military bases. The group will provide electrical, mechanical and building services for bases in Cyprus, Ascension Island, Gibraltar and the Falkland Islands, where Prince William is to serve a six-week tour of duty. The contracts are worth an estimated £60m a year for five years, with the possibility of a two-year extension. Interserve's shares closed at 321p on Friday, valuing the business at £406m, according to The Sunday Times.Legal & General, the FTSE 100 insurer, has made an approach for Cofunds, the fund supermarket in which it owns a 25% stake, in a deal which could value the business at up to £200m. The Sunday Telegraph can reveal that Mark Gregory, L&G's group executive director of savings, approached Charlie Eppinger, Cofunds' chairman, with a written expression of interest. The insurer's executive management team, led by outgoing chief executive Tim Breedon, is understood to want to build out its fund platform, which would act as an intermediary between fund managers and individual investors. However, the offer, which was put to the company's board last month, could yet be usurped following early-stage interest from Bridgepoint, the private equity house, which is understood to have indicated its desire to speak to Cofunds' board, the newspaper reports.The rising tensions in Italian sovereign debt markets may have caused some collateral damage north of the Alps and east of the Danube this past week, according to the FT's Weekend edition. For one, the risk premium on Austria's debt performed poorly, reaching a Euro-era record last Friday. The reason, according to analysts at Monument Securities cited by the newspaper, is that France and Austria have always been perceived as vulnerable, particularly Austria due to both its exposure to Italy as well as to Eastern Europe. Also worth watching out for, the risk that some Western-owned banks in some East European countries could begin to reduce credit, in response to a worsening of the situation in the periphery. One of the biggest oil producers in Kurdistan is preparing to float in London to take advantage of soaring valuations of firms involved in the region of Northern Iraq. DNO is the second largest Kurdish oil producer after Genel, the company that was taken over earlier this year by Vallares, the cash shell headed by former BP chief executive Tony Hayward. Norway's DNO, which trades on the Oslo exchange, plans to shift its primary listing to London in the new year after it completes a merger with Rak Petroleum, a Dubai-based oil group. The float plan comes in the midst of a frenetic landgrab in Kurdistan. Under Saddam Hussein's rule, the region was ignored while giant oil fields were developed in the south. Explorers have made several big finds, attracting new entrants like Exxon Mobil, The Sunday Times reports. "(...) As Joseph Schumpeter, the great Austrian economist, once wrote: "The monetary system of a people reflects everything that the nation wants, does, suffers, is." In the same way, the crisis that has engulfed the European Union (EU) is about much more than the euro. The euro zone still has the capacity to stop this run on its banks and governments. (...) But the EU has repeatedly failed to put forward a convincing euro rescue.(...) That is because the Europeans are deeply at odds over what the crisis is really about, and riven by disagreement over what each country must contribute towards solving it. So long as the Eurozone's members cannot settle these arguments, or at least agree that their differences matter less than finding a solution, the collective action needed to defend the euro will remain impossible," writes The Economist."So, while it is difficult to see HSBC rallying into the year-end, or for that matter StanChart unless the Indian market picks up, the UK's domestic banks could fare better. As long as there is no further blow-out in Italian bond yields or problems in Greece, of course. But for the first time in a while it is possible to argue that the UK's domestic banks are cheap and could outperform the wider market. If anything, that is what investors should be taking away from this reporting season. Along with HSBC's continued subprime problems," writes Neil Hume in the FT's Weekend Edition. The truth is that the risks of the euro splintering really have mounted. Angela Merkel, the German chancellor, and Nicolas Sarkozy, the French president, acknowledged at the recent G20 summit for the first time that they might abandon Greece to its fate?a devastating shift from leaders who had always insisted that the Euro would survive intact at any price. There is chatter that they are contemplating a new club of core Euro countries that can live within the rules, and jettisoning the rest. Such talk will make it harder for the ECB to convince markets that the euro is here to stay. But it may just put the fear of God into Europe's politicians?indeed, that may be the idea, writes The Economist in its latest weekly edition. Ministers are drawing up plans for a £50bn housing and road-building boom amid new fears Britain is heading for a double-dip recession. (...) The government hopes private investors, frustrated by low returns from traditional state bonds, will be tempted to pour cash into the infrastructure schemes. In return they will get the proceeds from tolls, rents and energy bills. (...) The infrastructure scheme is expected to be the centrepiece of a growth strategy to be unveiled alongside the autumn statement on November 29. The prime target for the money that will be released is house-building, after the number of new houses last year fell to the lowest level since 1923. Discussions are focusing on how to create an investment "vehicle" for the private cash that does not undermine the UK's triple-A credit rating or increase official government borrowing figures, according to The Sunday Times."The European Financial Stability Facility (EFSF) last week announced it had successfully sold a €3bn 10-year bond in support of Ireland. However, The Sunday Telegraph can reveal that target was only met after the EFSF resorted to buying up several hundred million Euros worth of the bonds. Sources said the EFSF had spent more than € 100m buying up its own bonds to help it achieve its funding target after the banks leading the deal were only able to find about €2.7bn of outside demand for the debt. (...) Chinese and Japanese money was crucial to last year's first bond sales by the EFSF (...) The move, by the European Investment Bank, will cause more disquiet among non-Eurozone EU members who have become concerned about their growing exposure to the cost of rescuing the currency bloc."One million state workers are to be transferred out of hospitals, colleges and job centres as part of David Cameron's "aggressive aspiration" to create John Lewis-mutual style public services. (...) At least 45,000 health workers have already left the public sector under the programme, including 10,000 nurses. A new right to request, where staff or a voluntary organisation can ask to run a service, has been created. (...) The real fear is that when contracts come up for tender again, the mutuals will lose out to private firms. Recently, Central Surrey Health, a social enterprise given a Big Society Award by David Cameron, lost out on a £500m contract to Assure Medical, a private company, amid claims that a £10m bond was demanded to guarantee the five-year deal, reports The Independent. AB