Ex-Mirror Boss Bailey Lands £400,000 Payout

By Mark Kleinman, City Editor

The former chief executive of Trinity Mirror is to land a windfall of about £400,000 from an incentive scheme triggered by a recent surge in the newspaper publisher's share price.

Sky News can reveal that Sly Bailey, who stepped down as the boss of the Daily Mirror owner in June 2012, will receive the payout under its 2011 long-term incentive plan (LTIP).

The payment to Ms Bailey will be disclosed in Trinity Mirror's annual report for 2013, which will be published alongside its full-year results on Thursday.

It may cause consternation among the group's shareholders, who saw Trinity Mirror's share price slump under her leadership amid broader concerns about the future of the newspaper sector.

Under the 2011 LTIP scheme, Ms Bailey was entitled to a maximum award of just over 379,000 Trinity Mirror shares, which would have been worth almost £820,000 at Wednesday afternoon's share price of approximately 216p.

However, Trinity Mirror's remuneration committee is said to have decided that the share scheme should pay out about half of the potential maximum after an assessment of the share price performance of 15 UK-based media companies. That peer group includes BSkyB, the owner of Sky News.

An insider said that the board and remuneration committee had decided to make a further discretionary reduction in the LTIP awards, which the annual report makes clear it is entitled to do. The reduction applies to all recipients of the 2011 awards and not only Ms Bailey, they added.

The value of the award will appear to be lower in the 2013 annual report because it is calculated based on the average share price during the final three months of last year, since when Trinity Mirror's shares have continued to rise.

"Irrespective of TSR (total shareholder return) performance, before any vesting can occur the Committee must be satisfied that the underlying performance of the Company has been satisfactory throughout the relevant performance period," the company said last year.

People close to Trinity Mirror said its board had examined whether it was possible to cancel Ms Bailey's deferred share award altogether but had concluded that it was not possible.

Directors had not expected the 2011 scheme to pay out at all at the time of the award three years ago because of the challenges facing Trinity Mirror, a source said.

Since her departure, when she received a £900,000 payoff, Ms Bailey's successor, Simon Fox, has overseen a surge in its share price, including a market-beating 80% increase in the last 12 months.

Mr Fox receives a basic salary of £500,000, one-third less than the £750,000 pay of Ms Bailey, while his potential cash bonus and LTIP potential awards are much lower than her entitlement.

Trinity Mirror has in recent months been increasingly linked to the tabloid phone-hacking scandal, although it has consistently denied any wrongdoing.

Last month, it took impairment charges of £925m related to the value of assets on its balance sheet, but at the same time upgraded its profit forecasts for the year.

Trinity Mirror declined to comment.

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Co-Op Must 'Work To Rebuild Customer's Trust'

The chairman of the Co-operative Group has told Sky News that the mutual will need to work hard to rebuild customers' trust.

Ursula Lidbetter said the Co-op must also implement governance reform in the wake of chief executive Euan Sutherland's resignation.

"The situation we are in is very sad, but the basis of the organisation is still there," Ms Lidbetter told Sky's Poppy Trowbridge.

"Our members, our customers, our staff, the members who get involved in our democracy - they are such good people.

"The organisation, fundamentally, is really good and sound but we need to get the public's support back with us.

Richard Pennycook is now running the Co-op Group

"It's all about customer confidence. It's about doing the right thing."

The Group confirmed a Sky News report this morning that Mr Sutherland had left his job, despite efforts by the board to change his mind.

Mr Sutherland resigned on a point of principle, citing the Group's structure as "ungovernable".

He was also known to be furious over a number of leaks to the media - leaks that he believed had come from the top of the organisation and included details of his pay.

Mr Sutherland said in a statement: "It is with great sadness that I have resigned as chief executive.

"I have given my all to the business and had hoped to be able to lead its revival. However, I now feel that until the Group adopts professional and commercial governance it will be impossible to implement what my team and I believe are the necessary changes and reforms to renew the Group and give it a relevant and sustainable future.

"Saving The Co-operative Bank and with it The Co-operative Group from administration was a huge task, but the changes required do not stop there, with fundamental modernisation needed to safeguard the 11 future for our 90,000 colleagues and millions of members.

"The Group must reduce its significant debt and drive major efficiencies and growth in all of its businesses, but to do so also urgently needs fundamental governance reform and a revitalised membership.

The appointment of now ex-bank chair Paul Flowers is being investigated

"I will not accept the retention payments and long term incentive payments previously agreed for the delivery and protection of value in the Group and the Bank, even though this was successfully delivered."

Ms Lidbetter confirmed Richard Pennycook - who was chief financial officer - had been appointed interim chief executive pending the appointment of a permanent successor to Mr Sutherland.

She said she had accepted his resignation with "deep regret."

An emergency board meeting on Monday night - held to discuss Mr Sutherland's resignation - also proposed a restructuring that would result in the current 21-member board being disbanded and replaced by two different structures.

One would be a PLC-type board while the other would represent members.

Ms Lidbetter has described the planned reforms as urgent.

The decisions were taken following a crisis for the Co-op which has seen its banking operation subjected to regulatory scrutiny after control was lost to US hedge funds.

A £1.5bn black hole in the bank's balance sheet sparked the Co-op's problems but the restructuring of the lender left the Group with just a 30% stake.

Mr Sutherland's own role was in focus at the weekend over plans to raise his own pay to £3.6m despite the mutual's problems and an expected worst-ever loss for 2013 of £2bn, due to be announced at the end of the month.

The Co-op could sell 15 farms and its pharmacy business

The debate over rising awards at the Co-op began just weeks after Mr Sutherland admitted the Group had "lost touch" with customers.

At that time he launched an online poll so the public could make suggestions about its future direction.

A plan to sell parts of its business also left question marks over more than six thousand jobs.

Mr Sutherland has only been in the job since last April.

He expressed fury about media leaks on Sunday in a Facebook posting to an employees' group after the news on pay awards appeared in a national newspaper.

He said: "I'm very sorry to have to report that we have had yet another leak to the media.

"This time it is to the Observer newspaper and concerns levels of annual Executive remuneration, including my salary, and also proposed changes to the Group Executive team.

"It appears that, once again, the leak has come from our Group Boardroom.

"We seem to have an individual, or individuals, determined to undermine me personally, my team and the rest of the Group Board regardless of the uncertainty and disruption this causes to our 90,000 colleagues and our supportive members.

"Despite this, I am determined that we will see through the vital transformation of our business."

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World Wide Web Celebrates 25 Years

Quarter Of A Century Of The Web

Updated: 3:07pm UK, Tuesday 11 March 2014

A timeline of the development of the World Wide Web.

1989: Margaret Thatcher is Prime Minister, Jason Donovan is number one and the world wide web is born. In Switzerland Sir Tim Berners-Lee proposes connecting ideas across the internet.

1990: The first web page goes live.

1993: Cern announces the world wide web can be used - for free - by anyone. HTML - the programming language to create web pages - is released.

1994: Web giant Yahoo goes live as "David and Jerry's Guide to the World Wide Web", and Bill Clinton puts whitehouse.gov online.

The web jungle grows - with Amazon online from 1995.

It's the beginning of the dotcom boom - a new marriage between money and the web begins.

Microsoft releases Internet Explorer. Online auction site eBay is founded as Auctionweb.

1996: Email is revolutionised wit the launch of Hotmail. A generation of embarrassing email addresses follows.

1998: Google opens its first office in a garage. Blogging begins with the launch of Open Diary where people share their innermost feelings online.

2000: The Millennium hits and the dotcom bubble bursts.

2001: Students around the world rejoice - online encyclopaedia Wikipedia is founded.

2002: The FBI put their most wanted online.

2003: Social lives go online with MySpace.

2004: The Facebook becomes a new way to socialise in US colleges - 10 years later a billion people will use it. Tim Berners-Lee is knighted for his contribution to the web.

2005: YouTube goes online. Cue hours of cats, kids and mishaps.100 hours of video are uploaded to the site every minute.

2006: Talking in 140 characters becomes the norm with Twitter's launch. Today over 500 million tweets are sent every day.

2007: Apple releases the iPhone, paving the way for mass use of smartphones. With the iPad in 2010, it revolutionises how we browse the web away from our desks.

2008: There are now an estimated one trillion unique web pages - with the number growing by billions every day.

2013: 50 billion apps have been downloaded on the Apple app store - more and more people access the internet directly, without using a web browser.

2014: New web domain names (the '.com' of a site) become available - some of the words include .cars and .london

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Payday Lenders Face Debt Sympathy Inquiry

A wealth of complaints about how payday lenders and other such firms treat their customers has prompted an inquiry by the City regulator.

The Financial Conduct Authority (FCA), which assumes oversight responsibility for the consumer credit market on April 1, said it was making a priority of the issue because three-fifths of complaints to the Office of Fair Trading (OFT) are about how debts are collected.

The watchdog, which has previously announced a range of measures to strengthen protections for consumers, wants to investigate how sympathetic lenders are when customers struggle to pay back their debts.

It will examine the culture at each payday firm.

More than a third of payday loans - equal to 3.5 million - are repaid late or not at all annually.

The new rules are expected to see a quarter of payday firms exit the market

The FCA said its new rules should help reduce the numbers.

They include limiting the number of times a payday loan can be rolled-over to two, the banning of misleading adverts and compulsory affordability checks for all loan applicants.

But the regulator said it also wants to see struggling borrowers helped by discussions on the different options open to them.

It expects that around one quarter of payday firms will decide they cannot meet its higher consumer protection standards and leave the market.

The consumer credit market is huge.

Around 50,000 consumer credit firms are expected to come under the FCA's remit from next month when it assumes responsibility from the OFT.

Around 200 of those firms will be payday lenders - a number already reduced through failures to adhere to market rules or simply leaving the market because of the looming regulations.

Analysis by the Competition Commission, which is carrying out a separate inquiry into the payday loan sector, found that such firms currently issue approximately 10.2 million loans a year, worth £2.8bn.

More than a third of payday loans are repaid late or not at all each year

The average size of a payday loan is £260.

By comparison, the entire consumer credit market is worth over £200bn.

Martin Wheatley, the FCA's chief executive, said: "There will be no place in an FCA-regulated consumer credit market for payday lenders that only care about making a fast buck."

The regulator is additionally considering a cap on the overall cost of short-term credit, which would be put in place early next year.

The Consumer Finance Association, which represents the biggest payday operators, welcomed the developments.

Its chief executive Russell Hamblin-Boone said: "We urge the FCA to use its proposed price cap on credit to tackle excessive default fees and charges which are used by the least reputable lenders to profit from customers who are already in dire straits.

"CFA members offer a range of help for customers in financial difficulty including freezing interest and charges to prevent a short-term loan becoming a long-term debt," he said.

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Facebook HQ Placed In Lockdown After 'Threat'

An apparent threat against Facebook's California headquarters has been dismissed by police after the campus was placed on a precautionary lockdown.

Staff were prevented from going home for almost 90 minutes until 8:30pm local time (0330 GMT) while officers investigated.

More than 6,000 people work for the social media giant but it was unclear how many were at the headquarters at that hour.

The site - at Menlo Park in the San Francisco area - was searched before the authorities decided the threat was "totally not credible".

Menlo Park Police Department spokesman Dave Bertini said Facebook personnel held employees inside.

"It was a totally not credible, unsubstantiated threat," he told reporters.

The spokesman declined to say what the nature of the incident was.

"I'm not even sure that it was specifically to the Menlo Park campus of Facebook," he added.

Facebook declined to comment.

The incident happened just a week after Facebook said it would pay to fund a full-time police officer to bolster security in the area around its HQ - a move seen as the first such partnership between a private company and police.

The company's offer to pay $200,000 (£120,000) annually for a minimum of three years was backed by the city council.

Ray Mueller, the Menlo Park mayor, shrugged off suggestions that Facebook could get special treatment, saying: "The only way you'd have a conflict of interest is if someone tried to exert influence over our police force.

"That's not going to happen."

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Poundland And Pets At Home Share Trades Begin

Conditional trading is underway in Poundland and Pets At Home shares, with offer prices valuing the businesses at a combined total of almost £2bn.

Europe's biggest single-price retailer, Poundland, set the price of its Initial Public Offering (IPO) at 300p a share, the top of its initial price range, valuing the company at £750m.

A source has suggested the offer was 15-times over-subscribed.

Its flotation would raise £375m, the company said, and see private equity firm Warburg Pincus reduce its stake.

Poundland was founded in 1990 and now has 500 stores in the UK and Ireland

Poundland's shares rose more than 15% in early conditional trading while Pets At Home stock slipped just below its offer price, dealers said.

Pets at Home confirmed it was floating shares at 245p apiece, in the middle of its initial price range, giving the company a market capitalisation of £1.2bn.

The sale of 40% of the firm is expected to raise £280m to help cover its debts.

The company is mainly owned by US private equity group KKR and run by chief executive Nick Wood, a former CEO of American Golf and himself the owner of two dogs and a hamster called Snuggles.

Pets At Home staff applied for shares worth £1.7m on opening

He said: "Pets At Home has enjoyed strong growth for over a decade and we are now ready to move on to the next stage of our development as a listed business."

Ishaq Siddiqi, market strategist at ETX Capital, said of the flotations: "Taken together, both IPO debuts will be seen as a success, as retail investors were given the opportunity to be involved in the IPOs.

"Both these companies are consumer facing, so highly popular in the UK."

Britain's retail industry is set for a flurry of offerings this year.

AO World floated in February, while Boohoo.com, B&M and House of Fraser are also expected to come to market.

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Security Firm G4S Takes £386m Annual Charge

The world's biggest security firm, G4S, has confirmed it took a £386m accounting hit in 2013 - another tough year for the company in the wake of the London Olympics fiasco.

G4S, which was publicly humiliated after it failed to provide enough staff to cover the Games in 2012, suffered further woes last year when it was banned from winning new Government work after it was found to have overcharged on a contract to tag offenders.

It said later on Wednesday, after announcing the charge, that it had agreed a repayment settlement, which Sky News reported on Tuesday was looming, with ministers of £108.9m relating to the tagging scandal.

The deal, which followed months of negotiations, was much higher in cash terms than the £24m G4S had offered in November.

Nick Buckles quit as chief executive last year

Its share price tumbled when the figure was released.

In its earlier annual results statement, G4S admitted the last 12 months had been "challenging", with its recent troubles over Government contracts pushing it into the red.

It confirmed a loss before tax of £170m for 2013, compared to profits of £150m the previous year.

Revenues rose 3% to £7.4bn amid stronger growth in overseas markets.

But part of its £386m charge - £136m of it - was down to a review of a large number of global contracts.

In May last year, Nick Buckles stood down as chief executive after the company issued a profits warning.

His replacement, Ashley Almanza, has moved fast to try and revive its credibility, increasing scrutiny on contract risks and strengthening management.

He had made a settlement agreement with the Government a priority and hopes the deal will again open the door to the possibility of new Government work.

Serco, another public sector outsourcing giant, paid £68.5m in December as a settlement for its role in the overcharging for electronic monitoring services.

In addition, it incurred millions of pounds in additional costs associated with the inquiries.

The scandal also remains the focus of an investigation by the Serious Fraud Office.

Shares in the firm, which runs other services from cash transportation and airport security to guarding tennis players at Wimbledon, fell 3% on opening on the FTSE 100.

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Roadchef Owner Delek Revs Up £350m Sale Plan

By Mark Kleinman, City Editor

The owner of Roadchef, one of Britain's biggest operators of motorway service stations, is preparing to sell the business for about £350m.

Sky News understands that Delek Group, an Israeli conglomerate with interests in energy, financial services and infrastructure assets, is appointing bankers to oversee an auction of the company.

Roadchef owns 20 motorway service areas including Watford Gap, arguably Britain's best-known refuge for tired and hungry motorists.

In total, the group's portfolio includes more than 20 sites around the UK, two of which are not situated beside motorways.

Delek, which bought Roadchef in 2007, is understood to be keen to take advantage of buoyant financing markets and the recent performance of the business to engineer a sale.

Roadchef's sites include franchise agreements with Costa Coffee, WH Smith, McDonald's and Regus, the serviced offices provider.

Citi, the investment bank, is understood to have been lined up to handle the auction, which will represent the latest of Britain's biggest motorway services operators to change hands.

Accounts filed at Companies House last autumn show Roadchef made a profit of £5.5m on sales of £222.2m in 2012, the most recent period for which figures are available.

In the accounts, it also warned that regulatory restrictions on the construction of new motorway service areas could hinder its growth, but said: "Management believes there are about 42m visits to the Roadchef Group's sites in a year and 68% of these visits result in the visitor being converted to a customer.

"The Roadchef Group's objective is to increase the conversion rate and the amount each customer spends.

"Recent investment in the catering offering at key sites has proven to reduce the level of non-conversion by between 10 and 15%."

Delek bought Roadchef from Nikko Principal Investments and Vision Capital, which had owned a minority stake since 2004, for £375m.

A £295m portfolio of sites owned by Welcome Break, one of the other major roadside services groups, was sold by the tycoon Robert Tchenguiz last year.

Little Chef, which employs 1,100 people, was recently taken over by Kout Food Group, which is the exclusive franchisee in Kuwait for Burger King and Pizza Hut.

A Roadchef spokeswoman declined to comment on Wednesday.

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Tesco Attempts To Arrest Market Share Slide

Tesco has fired a new salvo in the supermarket price war as it attempts to halt a slide in its market share.

While the chain remains easily top of the pile, its share of the UK grocery business has been eroded amid pressure from discounters such as Aldi and Lidl and upmarket competitors Waitrose and Marks & Spencer.

Its market share fell to 28.7% - its lowest since 2004 - in the 12 weeks to March 2 compared with the same period the year before, according to the latest data from market researcher Kantar Worldpanel.

As part of its new plans to improve its appeal, Tesco is offering loyal customers cheaper fuel depending on their weekly shopping bill.

The idea is for Clubcard holders to accrue points for money off on fuel, with savings potentially worth up to 20p a litre.

Earlier this week both Tesco and Asda reduced petrol prices by 1p a litre.

Tesco recently cut its profit margins as it bids to take the challenge to the rivals gaining ground on its long-held position of supremacy.

The chain - run by Tesco veteran Philip Clarke since 2011 - is 22 months into a turnaround programme that aims to arrest falling sales.

The company, which has 3,150 British stores, has spent more than £1bn on refits, more staff and new product ranges.

Speaking at the annual Retail Week Live conference, Mr Clarke insisted he did not feel any pressure from investors over declining market share but only expected to be in the job for a few years.

He said: "You only have a job like this for a few years.

"I am not a young man, I'm 54 years of age and I've given it 40 years."

He declined to comment on a Sky News report at the weekend that chief finance officer Laurie McIlwee, who has been with Tesco since 2009, was likely to leave in the next few months amid tensions with the chief executive.

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Candy Crush Owner Aims For £4.75bn Value

The firm behind the hit mobile game Candy Crush Saga could be valued at a staggering $7.6bn (£4.75bn) following its planned flotation.

King Digital Entertainment, which announced its intentions for a listing on the New York Stock Exchange last month, said on Wednesday the Initial Public Offering (IPO) of 22.2 million shares could be priced at up to $24 each.

Its statement, released by the US regulatory body the Securities and Exchange Commission, said: "We estimate that we will receive net proceeds from this offering of $326m.

King operates key offices in London and Stockholm, but bases its registered office in Dublin to assist with so-called transfer pricing.

"We intend to use the net proceeds from this offering for working capital and other general corporate purposes, which may include acquisitions."

Farmville was toppled by Candy Crush as the most popular mobile game

Candy Crush - King's top-seller - started life as a Facebook game in 2012 but can also be played online and on smartphones.

It involves moving brightly coloured sweets around a grid to get at least three of a kind in a row.

Candy Crush is the biggest game for users on Facebook, having ousted Zynga's Farmville, and is free but players can pay for extras to smooth their passage through its more than 500 levels.

King has previously said it has more than one billion users of its games globally, with a gross income of £509,000 a day from players topping up their game credits.

Rival Zynga was valued at $7bn when it made its play on the stock market in December 2011, but it has been on a losing streak since then amid strong competition.

Despite its 1.1 billion users, Facebook had a rocky debut after it went public in May 2012, raising $16bn in the biggest tech IPO on record.

Its shares fell by more than half in the ensuing months but have since recovered thanks to strong gains in mobile ad revenues.

Twitter's IPO raised $1.8bn in November 2013 - although shares later tumbled on warnings the short message network was overvalued.

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