Lucas has agreed to a pounds 4bn takeover by the US engineering group TRW.. Lucas reassures

LUCASVARITY yesterday reassured its 50,000 retired employees that their pensions would not be put at risk by the company’s sale to a US rival.
Lucas wrote to all its pensioners to tell them that union fears of a raid by a US buyer on its pension fund surplus – valued at up to pounds 1.2bn – were unfounded. 3i is expected to urge the investment trust’s main shareholders to put pressure on the Electra board to agree to a takeover. 3i’s campaign

3I, the venture capital group, is to launch a lobby campaign to convince shareholders in rival Electra to accept its pounds 1.2bn offer. The link will lead to 2,600 job losses in Goodyear’s US workforce.. Synstar to float

ROGER FERRe, the chief executive of Synstar, and four fellow directors are expected to own shares worth around pounds 15m when the computer services group joins the London Stock Exchange in March after less than 18 months in private hands.
Synstar, a management buyout from Granada for pounds 89m in September 1997, may be valued at pounds 200m.. Global tyre giant

GOODYEAR, the US tyre giant, yesterday merged its worldwide operations with Sumitomo Rubber of Japan creating the world’s largest tyre maker with sales of $15.5bn (pounds 9.6bn).
The US company will be the dominant partner and will control the European and US businesses of the enlarged group after paying $936m to Sumitomo.

However, the company dismissed speculation that it might target Whitbread as an acquisition, stressing that the company’s priority was organic growth.. Granada creates 2,500 new jobs

GRANADA, the media and hotels group, is to create over 2,500 jobs in its roadside catering and Travelodge businesses as it expands its leisure operations.
The news came as a Granada statement at its annual meeting yesterday said current trading was “very positive”. Salaries are the biggest item in the FSA budget, accounting for pounds 104.6m or 66 per cent.Mr Davies said the costs associated with the move to Canary Wharf were pounds 13m last year, but savings in terms of lower support costs were already being made.The banks have also gained a one-off saving of pounds 30m as a result of the shift to the FSA’s fee-based system.. These have been difficult to recruit over the past 12 months,” he said.The SFA head count is now up to 1,800, 4 to 5 per cent below the target of 1,900 Last June, turnover hit 20 per cent. “Mergers and down-sizing have been putting on the market the kind of people we would recruit,” Mr Davies said.The high turnover caused by integrating the various regulators, the move to Canary Wharf and the difficulty in finding replacements has put unacceptable pressure on existing staff and delayed some projects.The FSA claims to offer salaries competitive with comparable City firms, but it cannot match the large bonus elements of City packages.The higher staff level means that the control total for the FSA budget next year will rise by 9 per cent to pounds 158.5m, although that figure is just 1.9 per cent higher than the pounds 145m the FSA would have spent if it had had its full staff complement in 1998/99, a fall in real terms. Average pay in the City rose by 5 per cent last year, he said.
“The difficult areas where City salaries have raced away are lawyers, accountants and compliance officers in the securities area. Howard Davies, FSA chairman, said yesterday that with more people coming on to the jobs market, the gap that led the authority to underspend its budget by pounds 10m last year was close to being closed.

Yesterday, E-Trade, the number three online brokerage, suffered a freezing of its site and had to apologise to customers.As demand grows, the online dealing jam may get much worse before it gets better.. THE CITY jobs shake-out has come to the aid of the Financial Services Authority (FSA), putting an end to a recruitment crisis that threatened to compromise the City watchdog’s effectiveness in its first year. Most problems have been caused by websites simply unable to cope with demand. While the proposal is still under consideration, a special committee convened to study it last year came down against it this week.At the same time the Securities and Exchange Commission, the industry watchdog, has been deluged with complaints from investors about faltering service from online brokerages. While Internet stocks have risen strongly across the board, many individual issues have fluctuated wildly, sometimes by up to 40 per cent in an hour: eBay moved between $160 and $220 on 22 January.This week Charles Schwab, the leader in online brokerages, said it was increasing from 50 per cent to 70 per cent the amount of investor assets – or maintenance margin – required to back up any of 23 Internet and computer- related funds bought with borrowed money.The Nasdaq exchange, home to most hi-tech listings, is considering rules that would allow it to suspend trading in individual stocks when prices move too fast on a single day. About one in seven stock trades in the US are now conducted in cyberspace.
Latest estimates from CSFB show that online trading in January may have leapt by between 25 and 50 per cent.

Most of the increase was due to the seemingly unstoppable interest of individual investors in Internet stocks such as Amazon and the cyber-auction site, eBay.Concern is rising that some investors, overwhelmed by the prospect of fabulous hi-tech gains, may be overexposed. Wall Street has reeled in recent months from the impact of galloping Internet stocks and soaring popularity of online trading. Trading over the Web rose 34 per cent in the last quarter of last year. THE AMERICAN securities industry is seeking ways to curb wild swings in Internet-related stocks as investors continue their frenzied pursuit of profits, many of them trading online from home computers without advice or caution from specialist brokers. By the time it is complete, three-quarters of BT’s existing business customers will be no more than 500 metres from a direct connection to fibre-optic cable.Other operators such as MCI WorldCom, Cable & Wireless and KPN Qwest, a joint venture between the Dutch and US telecom operators, are at various stages of building pan-European networks based on Internet protocols.. The network will be formally opened in Amsterdam next month.Over the next five years, BT will expand the network in the UK to increase its reach. This could stem the steady flow of large business customers to rival operators such as Colt and WorldCom.”This is a major milestone in creating the foundation for electronic business on a pan-European scale,” said Chris Earnshaw, BT’s engineering and technology director.The amount of data traffic in the UK is expected to grow by more than 150 per cent over the next five years, creating a market worth up to pounds 10bn.

The use of Internet protocols will eventually make it impossible to distinguish between voice and data traffic.BT has just finished building its pan-European network, which stretches across 36,000 kilometres and links London and most of the major business centres in Europe. “They have been cautious about rolling it out until now because sometimes you can be too early with new technology.”The launch will be part of the investment programme announced yesterday, which will extend BT’s networks in the UK and continental Europe, allowing the company to offer a range of new services at lower prices.The network is based on Internet protocols, which divide voice and data traffic into small packages and fire them down fibre-optic cable at high speed.The technology increases the amount of telecoms traffic BT can carry, while bringing down costs and allowing it to offer new services. Industry observers expect the technology to be formally launched nationally later this year.”We are very positive about BT’s commitment to ADSL,” said Claire Rothman, telecoms analyst at SG Securities. For the first time in the Panel’s 31-year existence, he chose to question the impartiality of the executive’s director-general, Alistair de Freiz, on the grounds that he is on secondment from SBC Warburg Dillon Read, the brokers to Argos.