Charles Pretzlik: Private equity and Aim hit

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This afternoon is dominated, naturally, by the pre-Budget Report. And it’s bad news for private equity (and many smaller companies, including those listed on Aim).

Alistair Darling says those working in private equity must pay “a fair share” and has withdrawn capital gains taper relief in favour of a single CGT rate of 18 per cent. The chancellor may feel this is still competitive, but it is more than France, Italy, the US and Switzerland – and a whole lot more than the 10 per cent they are paying at the moment. Wander round Mayfair tonight and you’ll hear groaning from every bar and restaurant.

And yet, don’t believe those who tell you everyone in private equity is about to decamp to Geneva. First, anyone who tells you that hasn’t spent longer than a couple of hours there. And the fact that the threat to non-doms sounded pretty remote won’t make it any more interesting as a destination. But anyway, 18 per cent is in the 15-20 per cent range that private equity indicated it could live with. Indeed, Peter Taylor of Duke Street is on the wires sounding completely sanguine.

However, Aim, where you only pay 10 per cent tax on the gain on shares held for two years or more, must surely suffer from the move to an 18 per cent rate (not that the index reacted yesterday afternoon). The same, I believe, applies to shares held in your employer, so that’s bad news for company sharesave plans and options schemes.

On the other hand the change looks quite good for those with second homes. Whereas the best you can hope to get away with at the moment is paying 24 per cent, if you hang on until next April, you should only have to pay 18 per cent. So, sell your Aim shares now, use the proceeds to do up your cottage and flog that next summer.

Am still going through the notes to the PBR so may have more later. Keep an eye on the FT.com homepage and the blog for updates.

The chancellor also promises a statement on Northern Rock later this week. It looked at one point as if he might not, believe it or not. Earlier, Northern Rock and the Treasury said the government-backed guarantee arranged in mid-September for retail depositors would be extended to any new deposits savers make or have made since September 19. Fantastic - 6.3 per cent guaranteed by the government. Beats gilts. Race you.

There is a lot of other corporate news today. First, SABMiller and Molson Coors are to create a joint venture company to combine their US and Puerto Rican operations. SAB shares are up 2 per cent.

Second, Carpetright has confirmed our story this morning, announcing that Lord Harris of Peckham, its founder, is close to agreeing a buy-out of the business after four months of takeover talks. The deal is not uncontroversial, though, as Tom Braithwaite will explain.

Third, LogicaCMG has picked BT high-flyer Andy Green as its new chief executive. He will fill the gap left when Martin Read resigned after the IT services group issued a profit warning in May. The appointment went down well – Logica shares are up more than 8 per cent.

Fourth, a consortium led by Australia’s Challenger Infrastructure Fund and JP Morgan Asset Management has won the battle for Southern Water with a knock-out ₤4.195bn bid.

Fifth, we have yet another mid-market bid. This time Italy’s Eni is bidding for Burren Energy but Burren has said no thanks. Burren shares have shot through the offer price.

Finally, the other big event today is the FSA appearing before the Treasury select committee. We didn’t trust that bunch to come up with decent questions (their record is poor) and nor, it seems, did James Harding at the Times – we and he provided them with 10 things to ask today. FT Alphaville’s Helen Thomas was blogging away. Hector Sants admitted the FSA’s stress-testing wasn’t good enough and Sir Callum McCarthy seems to have had quite a rough ride. You can watch it for yourself online, of course.

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