Worries grow

Article Abstract:

The rise in value of pound sterling has affected UK exporters and this is likely to give rise to further profit downgrades. Vickers, Guinness and Redland have all issued profit warnings related to the pound. Companies have to reduce prices in order to compete abroad and withstand the impact of cheaper imports and the impact of this on UK businesses has yet to be taken into account. British Steel is one company likely to be hit by the rise in value of the pound, as are shares in diversified industrials, electronics, chemicals and engineering companies which have dropped since the start of 1997.

Prices and rates, Exports, Pound (United Kingdom)

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GEC learns patience

Article Abstract:

General Electric Co. is not permitted to bid for Thomson CSF by the French government, but the company could become involved in a bid with Alcatel-Alsthom or Lagardere analysts argue. A merger of Marconi and Thomson would give rise to a company with $12 billion annual sales which could compete with large US companies. The French government plans to announce the winner of the bid for Thomson in a few months from April 1997 and GEC has to decide if it is to back a bid by Alcatel or Lagardere.

Other Electrical Equipment and Component Manufacturing, Electronic Components and Accessories, Military Electronics, Mergers, acquisitions and divestments, Thales S.A., General Electric Co., GE, Military electronics industry

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Tax axe hits divi schemes

Article Abstract:

The UK Inland Revenue has closed a tax loophole relating to share buybacks and special dividends. Tax-exempt investors including pension funds are worst affected, and most payouts will not be affected. Investors will no longer be able to reclaim tax on special dividends paid during takeover bids, cash paid through share buybacks, and payouts from share capital restructuring of companies. This affects a scheme by Reuters to return cash to shareholders.

Public Finance Activities, Tax Administration, Laws, regulations and rules, Tax administration and procedure, Tax exemption, Tax exemptions, United Kingdom. Board of Inland Revenue

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