Sunday Round-Up: The main stories from the City pages

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The Independent Online
The Mail on Sunday

Business Expansion Scheme property companies that raised funds in 1988-89 are likely to return less than 40p in the pound to investors.

Simon Briscoe and Mark Reckless, economists at SG Warburg, claim that the official retail prices index overstates inflation by 2 per cent or more.

The Sunday Times

Brokers in London and New York are predicting sharp falls in share prices as stock markets absorb the implications of last week's news on the strength of US economic growth. Dealers expect further rises in US short-term interest rates. But Kenneth Clarke, Chancellor of the Exchequer, said markets were wrong to fear higher inflation in Britain.

RJR Nabisco is to sell its RJ Reynolds tobacco business, whose main brands are Camel and Winston, for about dollars 10bn. Britain's BAT Industries is a potential buyer as well as Japan Tobacco, the state-owned Japanese group.

Unilever is planning to streamline its portfolio of brands to concentrate on the leading ones such as Persil, Wall's and Birds Eye.

Lord King plans to step down as chairman of Babcock International this year, although he will become honorary president as he did at British Airways last year. The engineering group is planning a rights issue next month to raise more than pounds 60m.

John Rew, chairman of the Society of Names, forecasts that losses at Lloyd's will be worse than the insurance market's gloomiest predictions of 'above pounds 1bn' and could reach nearly pounds 3bn.

Three Wall Street investment banks, Goldman Sachs, Bankers Trust and Morgan Stanley, are independently considering acquiring the Broadgate office complex in the City of London. All have approached debt-laden Stanhope Properties, which owns half of Broadgate Properties and is seeking outside equity to restructure its balance sheet.

The insurance ombudsman could be sidelined by insurance companies when the Personal Investment Authority, which will be financed by insurance and investment firms, creates a new ombudsman later this year. The two ombudsman schemes are intended to run in parallel, but Julian Farrand, the insurance ombudsman, is considered by the insurers to be too sympathetic to customers.

The Sunday Telegraph

Goldman Sachs, the US investment bank, is on the point of settling claims over its involvement in the Maxwell pensions scandal. It could pay up to pounds 100m but would not admit any legal liability.

Gerald Ronson is to appoint UBS, the investment bank, to explore proposals for selling Heron, the debt-laden property group. Last week a bondholders' meeting due to vote on the deferral of interest payments was adjourned in the absence of a quorum. Heron is technically in default but is still trading.

Silvio Berlusconi is considering floating parts of his Fininvest media empire, which has pounds 1.2bn of debts, following his victory in the Italian elections. The group has already begun a debt restructuring.

Cheltenham & Gloucester, Britain's sixth-biggest building society, is considering a stock market flotation. It has appointed JP Morgan, the investment bank, as an adviser.

The Observer

Pressure for a rise in mortgage rates has increased following a massive withdrawal of funds from building societies in March. One estimate puts savers' withdrawals at pounds 500m, which would be the second biggest monthly outflow on record.

Boots could soon put its drug manufacturing business up for sale because of the high research and development spending it requires. Other alternatives to an outright sale, however, are still being considered.

Lawyers acting for the Salvation Army will seek a judgment against Larry Gillick, a Scottish businessman, in a bid to recover dollars 1.25m he received as part of a pounds 7.8m fraud against the charity.

British Gas is expected to close nearly half of its 425 high-street showrooms as part of its rationalisation programme, but it is also set to announce that customers will be able to pay their bills through post offices in future.

Independent on Sunday

London International Group, best known for making Durex condoms, faces a cash crisis because it is struggling to make an early sale of ColourCare International, its loss- making photo-processing subsidiary. The decision to sell ColourCare, which has 30 per cent of the UK photo-processing market, was announced in December as part of a restructuring plan following the group's interim losses.

Howard Hodgson, head of mini- conglomerate Halkin Holdings, faces the possibility of legal action over his directorship of Prontac, the computerised accounting company which collapsed in March 1993. Prontac's liquidator is seeking legal advice over whether its creditors, including Eurolife Assurance and P&P, the computer distributors, have a case against former directors under the Insolvency Act.

John Harris, chairman of East Midlands Electricity, is front-runner to become head of the new Coal Authority, which will take over responsibility for licensing mines from British Coal after its privatisation. Mr Harris surprised the City last month when he announced his early retirement from East Midlands on 30 April.

David Jones, founder of telephone share-dealing service ShareLink, is likely to be voted on to the Stock Exchange board in a reshuffle this summer following the appointment of Michael Lawrence as Stock Exchange chief executive. Sir Michael Richardson, chairman of Smith New Court, is expected to retire from the board, and Michael Marks, the firm's chief executive, to join it.

British Technology Group, privatised last year amid a storm of protest from the scientific community, is heading for a stock market flotation this summer. It could be valued at up to pounds 100m.

Eurotunnel's long-expected rights issue, likely to be announced shortly, will be some pounds 250m bigger than anticipated at around pounds 750m.

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