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Summary

  1. BT in preliminary takeover talks with two mobile phone operators
  2. Petrofac shares plunge 20% on profit warning

Live Reporting

By Joe Miller and Matthew West

All times stated are UK

Get involved

Joe Miller

Business Reporter

That's it from us for today. Join us again at 06:00 tomorrow.

Don't like Mondays?

Bob Geldof
BBC

Bob Geldof says that the price of a single has fallen 72% in the past 30 years. But has anything else fallen by more over that period? Our very own statistics guru Anthony Reuben

crunches the musical numbers.

Mobile phones

A fascinating fact courtesy of the Ofcom website: there were 83.1m mobile phone connections (numbers in use) in the fourth quarter of 2013 (the most recent figures available). That was down 300,000 on the same period in 2012.

Via Email

Royal Bank of Scotland

Nigel Brewer, who describes himself as "an ageing cynic", has emailed the Live Page with some strong words on the latest RBS scandal. He says: "It seems that the banks have not learnt one lesson to me," he says. "Quite frankly these so called 'errors' won't be stamped out until a few very senior bankers are imprisoned for considerable lengths of time - then and only then will the greed of banks be curtailed and a culture of transparency and honesty be instilled."

Dilbert

Today's

Dilbert's cartoon made us chuckle - at least more than any other request-for-proposals joke has in recent years.

Drone laws

Drone
PA

Drones have been all the rage in the tech world for some time now, but regulators and lawmakers have been slow to catch up. However

the Wall Street Journal reports that the US Federal Aviation Administration (FAA) will mandate that commercial drones have operators, and limit flights to daylight hours, below 400 feet and within sight of the person at the controls.

Tesla to work with BMW?

Tesla
Tesla

Tesla, the US electric carmaker that specialises in luxury coupes, may collaborate with a more established luxury brand - BMW.

Reuters reports that the firms may work together on "battery technology or charging stations," although Tesla spokeswoman says talks were "informal" at present.

ART HAUL

Cornelius
AFP

The Bern Art Museum in Switzerland has accepted a controversial collection of artworks bequeathed to it by German Nazi-era collector Cornelius Gurlitt. Mr Gurlitt gathered more than 1,200 pieces in his Munich apartment, including works by Picasso and Matisse. "Works included in the estate that turn out to be looted or have a high probability of being classified as looted art will be returned to the rightful owners," said museum spokesman Christoph Schaeublin.

Via Twitter

Nic Fildes, technology & communications editor at The Times

tweets: "One massive area of overlap for BT and O2 that regulators might not like is the business market, but relatively clean on consumer."

Joe Miller

Business Reporter

Why are mobile operators approaching BT, you may ask yourself? Well very few companies are in a position to be able to buy a firm the size of EE or O2, without falling foul of competition rules. Any rival carriers would struggle to get regulatory approval for such an acquisition - which would give it a significant share of the market.

BT to buy EE?

EE Taxi
EE

Reuters is reporting that yet another mobile operator has approached BT for a buyout. The agency cites "a person familiar with the matter" who says that EE, the UK's biggest mobile operator, has held talks with the group.

Telefonica to sell O2?

Telefonica
Reuters

Spanish telecoms group Telefonica has now issued a statement of its own, in which it says it is in preliminary talks with BT over a potential transaction involving its UK unit - that's O2. "Telefonica informs that, although it is in talks with British Telecom, these talks are in a highly preliminary phase and there is no certainty that a transaction will take place," the firm said.

Telefonica to sell O2?

BT shares are up 3.24% on the news. Telefonica up a more modest 0.6%.

Telefonica to sell O2?

BT's own plans to launch a mobile phone operator - it has already launched a service for business customers - see it launching in April 2015 at the latest, although a deal with another mobile phone operator would scupper the need to go ahead with that plan.

Telefonica to sell O2?

Cellnet
BT

For those with short memories, it's worth pointing out that O2 was once known as BT Cellnet (perhaps the above logo will bring it all back). So if the deal goes through BT will be buying back a business it eventually sold in 2005 - following a rebrand in 2002 - to Telefonica for £17.7bn.

BreakingBreaking News

Telefonica to sell O2?

So, BT has responded to press "speculation" that it is in talks with Telefonica to buy O2. It has issued a statement in which says it is continuing to develop its own plans to launch a mobile carrier next year. It adds two mobile operators have expressed interest in BT buying them out, of which Telefonica's O2 is one. "All discussions are at a highly preliminary stage and there can be no certainty that any transaction will occur," BT says.

Rise in poverty

The Joseph Rowntree Foundation has published a big report in

UK poverty levels today. One section, on pay, reveals the average self-employed worker earns 13% less than they did five years ago. It has also found a big rise in zero hours contracts, part-time work and people working for themselves. The JRF says there are now 13 million people living in poverty in the UK.

Friends life share price

...has jumped 7% this morning to 372.60p on the news of the Aviva takeover. Aviva's share price meanwhile remains 3.6% lower at 519.32p.

German confidence

A closely-watched survey measuring German business confidence has shown a rise for November - after six months of declines. The IFO institute's index rose to 104.7 from 103.2 points in October.

Market data

Some of you have emailed in about the BBC's market data pages, which are displaying old numbers this morning. There are some problems with the facility, but our software engineers are working on getting it up-and-running as soon as possible. Sincere apologies.

L'Occitane flourishes

L'Occitane
L'Occitane

French beauty products firm L'Occitane, which is actually headquartered in Luxembourg, reports a staggering 200% rise in pre-tax profits for the six months to the end of September. The firm made €40.3m, compared with €13.3m in the same period last year. However net sales are up just 9%, so the boost in profits is largely due to other factors, such as favourable currency exchange rates.

Telefonica to sell O2?

The logo of O2 Deutschland,
Reuters

Spain's Telefonica is in talks to sell its UK mobile operator O2 to BT according to Spanish website

El Confidencial. The deal would see Telefonica receive a 20% stake in BT as part of a "strategic alliance" to strengthen the pair, it says. Neither BT nor Telefonica have commented on the report thus far.

Intesa bid for Coutts

Private Bank Coutts Logo
Coutts

The Financial Times reports Italian bank Intesa Sanpaolo is

eying a bid for the Queen's bank, Coutts. Royal Bank of Scotland (RBS) owns Coutts, but last month it put the international arm of the bank up for sale. Intesa is cash rich with €16bn of excess capital sitting on its balance sheet, so it is looking to make acquisitions. It is, however, trying to convince RBS to sell its highly prized UK business as well, according to the FT.

Markets update

London's leading share index - the FTSE 100 - is down 0.1% in early trading, dragged down by Aviva, and further falls for major mining companies - including Rio Tinto, Anglo American, Antofagasta and BHP Billiton.

The detailed outlook on the main European markets is as follows:

  • The FTSE 100 is down 0.11% at 6,743
  • In Frankfurt, the Dax is down 0.1% 9,722
  • In Paris, the Cac is up 0.07% at 4,350

Aviva shares lower

It seems investors aren't all that impressed with the

Aviva takeover of Friends Life. Shares in the UK insurance giant are down 3.5% at 519p.

Petrofac outlook

Investors are really unhappy with Petrofac's downgraded profits outlook (see 07:49). Shares are down a whopping 20% in early trading. They are currently priced at 951.36p after opening at 996.50p.

Aviva/Friends Life deal

BBC Radio 4

"I think predominately its a financial transaction from an Aviva perspective," David Cumming, head of equities at Standard Life, tells

Today. He's talking about the proposed merger between Friends Life and the UK insurance giant. He says Aviva has seen an opportunity to make money and cut costs through the deal. Friends worked out the government's reforms of pensions put it in a weak position in the annuities market, which had been responsible for a lot of recent growth, he adds.

Sanctions hit Russia

Russia is losing $40bn a year due to economic sanctions imposed by Western governments in response to the Ukraine crisis, and up to $100bn a year because of falling oil prices, the country's finance minister, Anton Siluanov, has said.

Spanish bonds

Spanish Bonds
Bloomberg

Investors seem happy with the strident tone taken by Mario Draghi, the president of the European Central Bank, on battling deflation in the eurozone. The yield on Spanish 10-year bonds have fallen below 2% for the first time - although they have been dropping steadily all year, as the chart above shows.

Petrofac outlook

Petrofac
Petrofac

The effects of falling oil prices are being felt at oil and gas giant Petrofac. The company says it expects a $500m net profit in 2015 - much lower than analysts' estimates. "The foundations of the business remain strong," insists chief executive Ayman Asfari.

Insurance company restrictions

Insurance companies in the UK will be banned from covering the cost of terrorist ransoms, under

new anti-terror legislation to be announced by the home secretary, Theresa May, later today. The government says paying ransoms encourages kidnapping and it says Islamic State militants are taking hostages to fund their operations.

Via Twitter

Adam Parsons

Business Correspondent

tweets: "Turns out @LewisHamilton DOES still have TWO allocated parking spaces at Asda Stevenage. But the paint's faded a bit..."

Europe exit call

BBC Radio 4

Owen Paterson
PA

Former environment secretary, Owen Paterson, is to

call on the prime minister to renegotiate the UK's membership of the common agricultural policy and negotiate a new free trade agreement with the European Union. He will tell business leaders the UK could flourish economically outside the EU. He is also expected to call on the government to give two year's notice of its intention to quit the EU.

Royal Bank of Scotland

BBC Radio 4

RBS
EPA

Late on Friday, Royal Bank of Scotland (RBS) shares fell 4% after it admitted it had overstated its financial strength as part of the European Central Bank's stress tests. David Cumming, head of UK equities at Standard Life, tells the

Today programme that "it's an embarrassing mistake". But, he adds: "Ironically, RBS has one of the best capital ratio positions of the UK banks now, so there's nothing from a customers point of view to worry about".

Food producers' woes

Radio 5 live

It's like "removing nutrients from a plant," says Mr Swift of the squeeze on food producers. "Ultimately it will wither, and it may well die". He says the pressure on their profit margins leaves the firms "less able to deal with shocks." It is not the fixed prices for their goods that is hurting, he says, but the demand by supermarkets for suppliers to contribute to the cost of in-store advertising, promotions, or even refurbishment.

Food producers' woes

Radio 5 live

Duncan Swift, who works for the accountants behind the food producers report, Moore Stephens - tells

Wake Up to Money that the supermarkets are "removing the blanket" of money that allows food suppliers to pay their own suppliers, and to pay their staff a decent wage. It also means that food producers have no money to invest in new products, he says.

Chinese interest rates

China
AP

China's leadership and central bank are ready to cut interest rates again and loosen lending restrictions, over concerns that falling prices could trigger a surge in debt defaults, business failures and job losses, according to

a report from Reuters. The People's Bank of China is also open to the idea of cutting the banking industry's reserve requirement ratio (RRR), which effectively restricts the amount of money available to fund loans.

Food producers' woes

There's no doubt that customers are winning in the supermarkets' price war, which is pushing prices ever lower, but

one industry is really feeling the pinch. A record number of small food suppliers are going out of business, according to a large accountancy firm, because big retailers are pressurising them to sell their wares more cheaply, which is eating into their profit margins.

Lewis Hamilton

Radio 5 live

Lewis Hamilton
EPA

Our colleagues at

Wake Up to Money have managed to find a business-related Lewis Hamilton anecdote. Apparently, the double F1 world champion (
as of this weekend), was once awarded with a dedicated parking space at his local Asda supermarket.

Asian markets

China central bank
Reuters

Asia's main markets are all up this morning, buoyed by Friday's unexpected rate cut by China's central bank, which has sparked hopes of more action to combat the country's slowing economy. The European Central Bank's vow to fight deflation has also brought cheer to investors. The Hang Seng is up almost 2% at 23,898.34 and the Shanghai Composite is up 2.2% at 2,541.54. The Nikkei is closed for a public holiday.