Daily Telegraph
BLACKSTONE MOVES TO TAKE OVER GALA CORAL
Blackstone has been allowed to conduct due diligence
at Gala Coral after making an audacious late intervention in the
bingo group's 2.5 billion debt restructuring. Blackstone could
make a 250 to 300 million pound cash injection in Gala, which
was valued at five billion at its peak, in return for a majority
stake. Gala's private equity owners -- Cinven, Candover and
Permira -- have already agreed a deal with junior lenders
designed to keep the business' bingo and gaming divisions
together. However, this would be usurped should Blackstone's
offer be accepted.
TESCO MOVES CLOSER TO FULL BANKING WITH IT SYSTEM
Fiserv has been appointed by Tesco to provide the
software to enable it to become a full-service bank. Fiserv's
involvement, as one of the world leaders in providing retail
banking software, will turn the supermarket from a provider of a
collection of financial products into an integrated,
full-service bank which is expected to make great inroads now
that competitors are struggling. David McCreadie, commercial
director of Tesco Bank, called for patience in a meeting with
investors, saying it would take time to develop the correct
proposition on current accounts and that expanding into mortgage
lending would require a broader source of funding.
MERGE WITH HERSHEY, ANALYST TELLS CADBURY
Richard Royden, head of GFI's European Special Solutions
group, has called on Cadbury to merge with Hershey with
a dual-listing of the company's shares on the London and New
York markets. Royden told Cadbury chief executive Todd Stitzer
in a letter that the move would be its best defence against
Kraft's unwanted 10 billion pound bid. Fifty-five
percent of the company would be listed in London and 45 percent
in New York under Royden's analysis, minimising debt issuance
and avoiding "equity dilution for existing Hershey
shareholders".
The Times
UKFI'S FORMER HEAD IS SET TO JOIN ROTHSCHILD
NM Rothschild is expected to announce the recruitment of
John Kingman, former chief executive of UKFI, as managing
director on Monday. Kingman will advise "a number of corporate
clients" when he begins his new role in March. UKFI was set up a
year ago to manage the government's stakes in Royal Bank of
Scotland, Lloyds Banking Group and Bradford &
Bingley's mortgage book. The institution has had to
walk a difficult path in convincing investors it was acting on
commercial grounds while also adhering to the political will of
the Treasury.
RIO'S CLOUD PEAK COAL FLOAT FAILS TO SET INVESTORS ALIGHT
Shares in Rio Tinto's Cloud Peak coal operations
fell from 15 dollars to 14.45 dollars on their first day of
trading on the New York Stock Exchange. The listing is part of a
strategy Rio has for divesting non-core assets and reducing its
debt burden, with the flotation raising 434 million dollars for
the mining group. Francis Gaskins of research website
IPOdesktop.com said: "There's investor push-back because (the
money raised) is not going back to the company and it's not for
growth. It's just a Rio Tinto bailout."
LACK OF M&A BUSINESS CUTS REVENUE AT LINKLATERS
Linklaters saw revenue fall by almost 10 percent in the
half-year ending October 31 despite winning big legal work in
dealing with the economic downturn. A lack of mergers and
acquisition activity was blamed for revenues falling from 653
million to 591 million pounds year-on-year. Linklaters earned
almost 70 million pounds for its work on the European division
of Lehman Brothers' administration and is continuing to work
with Royal Bank of Scotland. Simon Davies, managing partner of
Linklaters, said M&A activity had recovered in recent weeks,
particularly in emerging markets such as India, Brazil and
China.
The Independent
BARCAP TAKES OVER CRESCENT FROM MORGAN
Morgan Stanley has handed over its Crescent property
business to Barclays Capital, drawing a line under the
6.5 billion dollar deal that was struck in 2007 but quickly
soured. Morgan Stanley is to transfer ownership of the business
to BarCap in exchange for Barclays taking responsibility for all
liabilities of loans relating to Crescent. Morgan's plans to put
Crescent's assets into real estate flopped when the market
froze. Barclays acquired Crescent in a joint venture with its
co-founder John Goff.
GARTMORE SETS HARE RUNNING ON FLOTATION BOOM WITH BILLION
POUND LISTING
Gartmore intends to list its shares on the London Stock
Exchange next month, valuing the business at at least one
billion pounds. The flotation is intended to raise 250 million
pounds for the company, enabling it to reduce its 400 million
pound debt to 150 million. Forty-three percent of Gartmore is
owned by its management, who will be allowed to cash in up to 20
percent of their stock. Jeff Meyer, the chief executive, said:
"The market has been recovering. There are a lot of companies
likely to come to market next year. We thought we would open the
gateway."
FULLER, SMITH & TURNER BUOYANT AMID DOWNTURN
The pubs and brewing group Fuller, Smith and Turner has
announced pre-tax profits of 14.1 million pounds for the 26
weeks to September 26, an increase of 18 percent. The boost has
been attributed to low interest rates, good weather and a
reduction of costs, including pay. The increase in VAT and
absence of some of these factors could mean that the company's
success does not continue. The company also gained from
acquiring seven managed pubs in the West End from Punch Taverns .
THE GUARDIAN
STATE BANKS "UNDERMINING BUILDING SOCIETIES"
Nationwide Building Society has criticised
state-backed banks for distorting the savings market by pricing
their accounts "uneconomically". Nationwide has announced
profits down to 117 million pounds from 322 million pounds at
the same time last year and has said that its commitment to
keeping mortgage interest rates more closely tied to the Bank of
England's interest rate has cost them more than 450 million
pounds a year. Nationwide chief executive Graham Beale also said
that new minimum capital amounts dictated by European law would
disadvantage building societies, whereas banks would be able to
source capital from shareholders.
MORE THRESHERS SHOPS CLOSE AS BUYERS LOSE INTEREST
First Quench, the group that owns Threshers and Wine Rack,
is intending to close a further 381 of its stores, resulting in
up to 2,000 further job losses. An initial round of closures and
job losses was announced two weeks ago, but lack of interest in
the purchase of the remaining stores has caused administrators
KPMG to make more cuts. Richard Fleming, one of the
administrators from KPMG, has said he is optimistic about
selling "a significant number" of the remaining 500 stores as
going concerns.
BRITISH FARMERS TO GET MORE THAN A SLICE OF THE HOVIS FLOUR
MARKET
Hovis is planning to exclusively purchase wheat that was
grown in Britain. Currently Hovis uses between 25 and 50 percent
British wheat with the remainder being imported from Canada.
Trials of growing the Canadian strain of wheat have been
conducted in Britain for the last five years and Hovis' decision
will pump 18 million pounds into the British farming industry.
Other big bread brands are continuing to import wheat from
overseas, but Warburtons is to launch a loaf made entirely from
British wheat.
Prepared for Reuters by Durrants
Keywords: PRESS DIGEST British business Nov 21
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