Sunday newspaper round-up: BAE Systems, Aviva, Lloyds Banking

Directors of BAE Systems rejected a £300m settlement of a Serious Fraud Office investigation after receiving advice they would leave themselves open to civil lawsuits for a misuse of shareholders' funds.The offer, made by the SFO in recent weeks, came after lengthy talks over a plea bargain deal to end an investigation of alleged bribery in Africa and central Europe, the Sunday Times reports.Aviva is expected to announce tomorrow that it will raise at least £1bn through a partial flotation of Delta Lloyd, its Dutch insurance division. Britain's largest insurer was believed to be putting the finishing touches to the deal this weekend. It is expected that Aviva will float between 30% and 40% of the business on the Euronext stock exchange in Amsterdam, valuing the company at about £4bn, the Sunday Times reports. The new generation of Minis will be built in a German factory as well as at Cowley - another blow to the British car industry. Cowley, the Oxford plant that is one of the UK's biggest remaining car factories, cannot meet demand for all the new vehicles, including the new Coupe and the Roadster. It builds around 200,000 cars annually but the launch of the new Minis means the plant will soon exhaust capacity and a new production line will be needed, the Sunday Independent reports.United Utilities is set to divide the £800m sale of unregulated assets into at least two auctions. Broker JP Morgan Cazenove, which has been assessing options for United businesses not regulated by Ofwat over the summer, is expected to present its recommendations to the board later this month, the Sunday Independent reports.Baosteel, China's largest iron and steel conglomerate, wants to forge an alliance with Anglo American, the mining company that rejected a merger approach from rival Xstrata in June. Baosteel has tabled a proposal to pay £1bn for a 30% stake in Anglo's huge Minas Rio iron ore mine in Brazil, which it acquired last year for £3.7bn, the Observer reports.Lloyds Banking is expected to stir up a fresh outcry over banking bonuses as it draws up plans for a multi-million pound incentive programme for its top managers. The bonus plan is the first to be put in place since the banking giant was created from the merger of Lloyds TSB and HBOS and subsequently bailed out by the taxpayer, the Sunday Times reports.Alistair Darling has said the Treasury will study proposals from the International Monetary Fund for a tax on banks to provide for poor countries and offer insurance against future financial crises. However, the chancellor, attending the annual meetings of the IMF and World Bank in Istanbul, warned of practical difficulties and said such a tax would be rejected if it worked to Britain's disadvantage, the Sunday Times reports.Britain will not give up its permanent seat on the International Monetary Fund (IMF) without a fierce battle, Chancellor Alistair Darling indicated on Saturday as he fought behind the scenes to safeguard Britain's prominence on the world economic stage. The Chancellor said the UK, which is one of the IMF's biggest contributors, would insist on "no taxation without representation," adds the Sunday Telegraph.Matalan, the discount clothing and homeware retailer, could be put up for sale next year with a £1.5bn price tag. A sale would net hundreds of millions of pounds in profits for its founder John Hargreaves, who took the business private in an £827m deal backed by £410m of debt three years ago, the Sunday Times reports.Virgin Media and British Telecom have launched a detailed attack on Sky's pricing mechanism for its premium channels such as sport and films, saying that its "near monopoly" of the pay TV market means increased prices for consumers. In a submission to Ofcom the two media and telecommunications companies, along with Top-Up TV, the company which offers Freeview access and tape-free recording, say that the lack of competition in the market is stifling growth and innovation, the Sunday Telegraph reports.The recession's impact on the UK's cut-throat supermarket sector will be laid bare this week when Tesco, the country's biggest retailer, unveils flat first-half profits. Tesco will say on Tuesday that pre-tax profits for the six months to the end of August were £1.46bn compared to £1.45bn last year, according to analysts' forecasts. It will be the first time since 1999 that interim pre-tax profits at Tesco have grown by less than 10%, the Sunday Telegaph reports.Bookmaker and bingo club giant Gala Coral is in advanced talks on a financial restructuring that will see lenders write off £540m of loans in exchange for a big stake in the business. The private-equity firms that own Gala Coral ? Candover, Cinven and Permira ? are expected to agree to surrender up to half their stake. It will be taken over by a group of lenders led by two investment groups, Intermediate Capital and Park Square, the Sunday Times reports.Plans to force Britain's banks to pump money into poor communities in exchange for their massive taxpayer bailouts are being drawn up by the Treasury, a senior minister has revealed. Liam Byrne, chief secretary to the Treasury, said last week that the time was ripe to consider a UK version of America's Community Reinvestment Act, introduced in the 1970s to prevent banks abandoning deprived areas, the Observer writes.RSA has abandoned plans to raise $1bn (£614m) in a rights issue after scouring the markets for takeover targets. The FTSE-100 insurance group, formerly known as Royal & Sun Alliance, has told bankers to scrap the multi-million pound fund-raising after some of its main targets ruled themselves out of a sale, the Sunday Telegraph reports.Nationalised Northern Rock was yesterday accused of forcing up mortgage rates by starving rivals of vital cash from savers. The practice has left millions of borrowers paying more for their mortgages because building societies cannot afford to cut rates, it was claimed, reports the Mail on Sunday.