(CW-.L) Cable and Wireless PLC Buy/Sell

Financial Times

CABLE & WIRELESS TO REVIVE DEMERGER PROPOSALS

Cable & Wireless is readying the announcement of its first-half results on Thursday. The telecoms company is also expected to resume plans to demerge its UK and international businesses, pursuing separate stock market listings in the first half of 2010. The plans had been on hold since November of last year following difficult financial conditions. A demerger could spark takeover interest -- something Cable & Wireless hopes will bolster its share price that has performed weakly this year. Analysts are predicting C&W's results for the first six months of 2009-2010 to have been hit badly by the recession but they have also pointed out that a raft of cost-cutting measures has acted as damage limitation.

PRIVATE EQUITY DEALS HIT THE BUFFERS

In what is being seen as a clear indication of the private equity industry's struggle to protect its investments, a number of private equity-owned UK companies purchased before the recession have been taken over by lenders amid worsening economic conditions and spiralling debts. Most recently, Linpac, a plastic packaging supplier to Tesco and McDonald's, has been taken over by lenders, including Lloyds Banking Group, in a restructuring that cuts the company's debts in half to approximately 320 million pounds. Another wave could potentially see Apax Partners-owned Hit Entertainment and Cinven's Gala Coral reclaimed by lenders.

AUREOS PLANS FUND FOR SOUTHEAST ASIA

On Monday, Aureos Capital will announce plans to raise a new 250 million dollar fund to invest in southeast Asia, in particular the Philippines, Indonesia, Malaysia, Brunei, Thailand, Vietnam, Cambodia and Laos. The emerging market private equity group already has a roster of global funds covering regions such as central America and Africa. Prior to Monday's annual investor meeting in London, Sev Vettivetpillai, the chief executive of London-based Aureos Advisers, said: "The emergence of China and India means southeast Asia is often a forgotten region, just like Africa, but 40 percent of exports from southeast Asia go to China." Vettivetpillai continued by outlining Aureos' intention to raise one billion dollars to invest in the region over the next two-to-three years.

KRAFT SET FOR STRONG RESULTS AS IT EYES CADBURY

Kraft is hoping a strong showing from its results will boost its chances of success in its takeover bid for Cadbury. Analysts are expecting Kraft to exceed consensus earnings expectations of 48 cents per diluted share, which could go some way to settling investors' nerves over the Cadbury takeover. Despite share price fluctuations since the initial cash and shares offer was unveiled in September, Kraft's shares closed up at 27.52 dollars on Friday. With no counter-bidders, investors are growing increasingly confident that Kraft will be able to seal the Cadbury acquisition with an offer of 800-850 pence per share, valuing the UK confectionery company in excess of 10 billion pounds.

SANTANDER GREEN LIGHT FOR RBS BUSINESS BRANCHES

An agreement has been reached between Brussels and London over competition guidelines that will enable Santander to bid for Royal Bank of Scotland's business-focused branches. If successful in its bid for the 312 RBS outlets, the Spanish banking group would build on the eight percent share it currently holds of the UK small business lending market. However, with 14 percent of the retail banking market, Santander will be allowed to purchase only a handful of the retail branches set to be sold off by RBS and Lloyds Banking Group as part of government plans to prevent any one bank holding more than a 15 percent market share.

MIRABAUD TAKES TOP AIM BROKER SLOT

The latest Hemscott Aim Rankings Guide places Mirabaud Securities at the top of a league table of Aim stockbrokers. The private wealth manager, founded in 1819 with London operations opening in 1990, has displaced Collins Stewart and Numis Securities to become the largest Aim broker by market capitalisation. Despite having just 25 clients, chairman Marc Pereire points to the rising share prices of its energy, material and technology clients as the reason for topping the rankings.

MORRISONS WANTS MORE SUPPLIER SUPPORT

As the rising food prices that characterised the financial landscape for UK supermarkets last year begin to level out, Wm Morrison is seeking increased support for promotions from its suppliers in what is being seen as an indication of growing competitiveness in the grocery sector. In terms of promotional activity, Morrisons is thought to be falling behind its competitors, Tesco, Asda and J Sainsbury . Suppliers are expecting the supermarket to strike up negotiations in the next few weeks, with the intention of reaching agreements by early 2010, although one supplier said that it would support promotions only if the benefits would be felt by both businesses.

FREIGHT CRISIS RAISES PROSPECT OF EMPTY SHELVES

The replenishing of supplies could become difficult for UK retailers in the lead-up to Christmas due to the difficulty of predicting consumer spending and the worst crisis in 20 years gripping the global freight industry. According to Transport Intelligence chief executive John Manners-Bell, companies such as Nokia, Ericsson and Philips have already expressed concerns that deliveries over the Christmas period could be fraught with problems. The crisis in the freight industry, which has seen cargo volumes fall by 20 percent in the first quarter of 2009 against the previous year, has resulted in shipping giants such as Maersk and Hapag-Lloyd being hit with sizeable losses.

CLOTHING CHAINS SUFFER SEASON IN THE SUN

When Marks and Spencer, Next and Primark owner Associated British Foods report on their performances this week, it will provide a clear indication of the effects of the recent spell of unseasonally warm weather on sales of winter clothing. In the build-up to the Christmas party season and taking delivery of little black dresses, stores could be left with unwanted stocks of thick knitwear and coats. Arcadia owner Sir Philip Green said: "If it could be ten degrees colder, I would be very happy." However, the good news for retailers is their sales will be compared to those of a year ago, when the banking crisis was in full swing. In addition, the warm weather could mean that consumers might be spending less on their heating bills leaving them with more disposable money.

Prepared for Reuters by Durrants
Keywords: PRESS DIGEST Financial Times Nov 2

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