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Financial Times

CADBURY INVESTORS BRACED FOR 10 BILLION POUND HOSTILE BID

FROM KRAFT

With UK confectionery group Cadbury reluctant to enter into friendly takeover negotiations, U.S. food giant Kraft looks likely to launch a hostile bid worth more than 10 billion pounds before the Takeover Panel's November 9 deadline. According to Bank of America/Merrill Lynch, there is a 75 percent chance the U.S. food group will carry out such a move, with a new anticipated cash and shares offer of 780 pence per Cadbury share. However, investors are still holding out for a valuation of 850-900 pence. Cadbury's shares have risen 202.5 pence since the approach was made public on September 4.

MILL GROUP PLANS TO FINANCE HOME BUYING

Mill Group is set to launch a 500 million pound institutional investment fund next week-- the Investors in Housing fund -- targeting residential property in the capital and in the southeast. The specialist property company is hoping to capitalise on the apparent recovery in the housing market and joins a growing list of companies venturing back into the sector. The fund will enable buyers to enter into a partnership with Mill Group, acquiring a share of the property before paying the mortgage and a monthly indexed fee to cover the capital investment costs. "It is a win for hard-pressed buyers (and) also a win for investors and developers who will see a new group of buyers," said David Toplas, chief executive.

RBS LANDS DEAL TO QUIT TOXIC ASSET SCHEME

Royal Bank of Scotland is hoping to break free of the government's state-backed asset insurance scheme within a year, having struck a deal that will see the bank avoid paying the upfront fee of 17.5 billion pounds levied for joining the scheme for five years. As a condition of the deal, the bank will instead absorb the first 60 billion pound's worth of losses on toxic assets insured by the scheme rather than an initially-agreed absorption of the first 19.5 billion pounds. RBS is currently considering which of its assets to shed -- potentially its Direct Line and Churchill insurance brands -- in order to pay off the state aid it has already received.

HALLOWEEN SPAWNS MONSTER HIGH STREET SALES

UK retailers, among them J Sainsbury, Asda and Tesco, are hoping for record sales over Halloween with the season having grown in importance over the past decade. Retail research group Planet Retail is predicting an increase in spending from 195 million pounds in 2008 to 235 million pounds for this year's Halloween. Beverley Aspinall, Fortnum and Mason's managing director, suggests Halloween is now a bigger event than Valentine's Day for the retail industry.

M&S SEARCH STRATEGY COMES UNDER QUESTION

A number of Marks & Spencer's leading shareholders have suggested the company should appoint a new executive chairman to replace Sir Stuart Rose before searching for a new chief executive. The call comes after ITV found itself in a similar situation last month, failing to appoint a chief executive to take over from Michael Grade who occupies the role of both chief executive and chairman. Marks & Spencer is due to reveal its first-half results on Wednesday. Analysts are predicting pre-tax profits of 285 million pounds for the six months to September 30.

HUTCHINGS LOSES VOTE OVER REJECTION BY LUPUS CAPITAL

Despite losing a crucial shareholder vote to reinstate him as the executive chairman of Lupus Capital, Greg Hutchings, who holds an 11 percent stake, has said he will not walk away from the business. However, Keith Taylor, who took over as chief executive following Hutchings' resignation in July, believes his predecessor needs to do "what is good for the business. He should move on". Hutchings' bid was unsuccessful because the company felt a return would create a rift between Lupus and its banks -- a point that was apparently confirmed by David Lis, Aviva Investors' head of UK equities, which has a 15.2 percent stake in Lupus. According to Lis, he would not back Hutchings due to historical differences between the former executive chairman and the engineering investment company's banking syndicate.

YELL CLOSE TO FINAL SEAL ON DEBT PLAN

On Friday night, Yell required the approval of just one remaining lender in order to push through restructuring plans for its 3.8 billion pounds of debt, which would include a 500 million pound equity raising to reduce its debt to 3.3 billion pounds. If the lender, thought to be a Spanish bank, remains immovable on the issue, Yell is likely to use a scheme of arrangement to legally force the plans through. The news that the directories group is poised to secure the 95 percent backing it requires pushed Yell's shares up four per cent to 51.25 pence.

MEGGITT SEES AIR TRAFFIC REVIVAL

Meggitt is on course to announce earnings in line with expectations on the back of robust military sales, a stabilisation of the civil aviation market and a focus on cost-cutting. In a statement, the aircraft parts supplier revealed it expects "air traffic in general to recover by 2010", adding: "The lower cost base, together with our large installed fleet, sole source positions and sound financial position, leave us well placed to benefit when economic conditions improve." Meggitt's shares were up 13 pence to close at 245 pence.

SCRAPPAGE BUOYS LOOKERS

Car-dealership chain Lookers has predicted an improvement on last year's full-year results thanks to a solid independent car parts business and the government scrappage scheme. The scheme meant that, while overall UK car sales were down 15 percent on 2008's figures, Lookers suffered only a four percent drop, selling 4,500 cars since the introduction of the initiative. Shares at the group were up 0.5 pence, closing at 59 pence.

STRICKEN WYG PLANS RESTRUCTURING

Engineering consultant White Young Green is planning a restructuring package that will hand 60 per cent of the company to its lenders. If the plan is successful, the value of shareholders' investments will fall to less than one million pounds. Lloyds, RBS and Fortis UK, the company's principal lenders, will continue to defer tests on WYG's debt covenants until the result of consultations determines whether the restructuring will be approved. The extraordinary meeting must be held before December 14. WYG's shares, which have plummeted 91 percent over the past year, closed down one pence at 10.75 pence.

Prepared for Reuters by Durrants

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