The Times
BA AND IBERIA MERGER CLEARED FOR TAKE-OFF
British Airways and Iberia have agreed a
merger deal that will create Europe's largest airline. The deal
is expected to trigger cost saving measures at both airlines
with job losses at head offices in London and Madrid,
maintenance facilities and among sales staff. The value of the
combined airline will be 4.5 billion pounds ($7.46 billion). BA
shareholders will control 56 percent of the new group and Iberia
the rest. Under the terms of the deal, BA will be incorporated
in Madrid, but the headquarters and stock market listing will be
in London. BA's Chief Executive Willie Walsh will head the
merged group.
CAUTIOUS 3I TURNS ITS BACK ON NEW INVESTMENTS
Private equity group 3i said it has not made a single
new company investment in the past six months as uncertainty
about the real value of assets made investors cautious. Chief
Executive Michael Queen said it was the quietest period for new
investment since he joined the group in 1987. However, 3i was
confident investment volumes would pick up in the next year and
it had put aside two billion pounds to make acquisitions in
traditional buyouts, growth companies and infrastructure deals.
ENTREPRENEURS ACCUSE RUTLAND OF CONTRACT BREACH
Two entrepreneurs, Paul Vercoe and John Pratt, have accused
Rutland Partners, a private equity firm, of pushing them aside
after they presented the group with a business plan to buy and
expand Harvey & Thompson, a private pawnbroker. The pair say
that in return for the plan, they would be given senior
positions and equity stakes in the business once the takeover
was complete. The High Court was told that Rutland committed a
breach of contract and confidence when they acquired Harvey &
Thompson "without the slightest regard" to its obligations to
Vercoe and Pratt.
TEMPUS:
Serco (short-term investors should pause for thought)
Amec (stand aside)
Synergy Healthcare (buy on weakness)
The Daily Telegraph
EAST COAST LINE TAKEOVER THWARTS NATIONAL EXPRESS MOVE
Transport Secretary Lord Adonis will take control of the
National Express' East Coast franchise at one minute to
midnight today in order to stop the company retaining the right
to extend its East Anglia franchise for three years from April
2011. When National Express began operating the service in 2004,
a clause in the contract allowed for a three-year extension
provided certain performance criteria were met. A senior
National Express source said Adonis had been "cute with his
timing" even though the stipulated criteria had been met.
KENMORE CALLS IN THE ADMINISTRATORS, BUT SAYS IT IS
'BUSINESS AS USUAL"
Edinburgh-based property group Kenmore has placed
21 of its companies into administration and a further two into
receivership. Accountants Grant Thornton said funding had been
secured from Lloyds Banking Group that will enable
Kenmore to continue to trade while restructuring opportunities
are explored. The company employs 50 staff in Britain and has
investments in Britain, Europe and the Middle East. Grant
Thornton's Rob Caven said: "Our immediate objective is business
as usual."
AD SALES DECLINE SLOWS AT TRINITY
Trinity Mirror reported a slowdown in the decline of
advertising revenues with its national titles undergoing the
biggest improvement. The owner of the Daily Mirror, Sunday
Mirror and The People, said advertising sales were down by 20
percent in the 17 weeks to October 25, compared with 28 percent
in the first half. Figures for regional publications are also
set to improve. The company also reported that online
advertising was down 19 percent year-on-year, but in the 17
weeks to October 25, digital sales were down 22 percent on those
12 months ago.
QUESTOR:
Inmarsat (buy)
HSBC Infrastructure Fund (buy)
The Independent
ASDA SALES GROWTH HIT BY FALLING FOOD PRICES
Supermarket Asda has blamed declining growth "entirely" on
falling food price inflation. Its third-quarter like-for-like
sales excluding fuel and VAT increased 5.9 percent, compared
with a 7.2 percent increase in the second quarter. Judith
McKenna, Asda's finance director, said that the decline in
growth had happened despite a rise in sales volumes and profits.
In non-food lines, McKenna forecasted strong competition on
price, saying that this year would "be the most aggressive on
price in a decade".
COSTCUTTER TO BID FOR THRESHERS' ESTATE
Convenience store chain Costcutter looks set to join three
competitors in bidding for large parts of First Quench
Retailing's store estate. Along with off-licence operators
Rhythm & Booze, Bargain Booze and EFB Retail, Costcutter is
expected to inform administrator KPMG of its interest on Friday.
KPMG, which is looking to sell the business while the stores are
still adequately stocked, is keen to complete the sale of FQR's
estate in the next two weeks.
WH SMITH CAUTIOUS ON CHRISTMAS OUTLOOK
WH Smith has revealed a sales decline in the 10
weeks to Nov. 7, and remains cautious over its Christmas trading
prospects. Total group sales since Sept. 1, the start of WH
Smith's financial year, fell one percent on 2008. Underlying
sales at railway stations and airports fell two percent. The
high street was the worst-hit sector, with a four percent dip in
same-store sales. WH Smith said overall performance met
expectations.
INVESTMENT COLUMN:
Euromoney (buy)
Resolution (hold)
Dairy Crest (hold)
The Guardian
BT CHIEF CALLS FOR 1.5 BILLION POUND COST CUTS
Ian Livingston, chief executive of BT, said on
Thursday that the company now plans to save "at least" 1.5
billion pounds this year, raising the prospect of further job
cuts. Livingston also revealed that BT's pension fund, Britain's
biggest private sector scheme, had a 9.4 billion pound deficit
at the end of September, In May, Livingstone announced plans to
cut 15,000 workers over a 12-month period as part of a plan to
save one billion pounds. In Thursday's announcement, he did not
say whether his new plans for increased savings would result in
over 15,000 jobs being lost.
MAYFAIR-BASED HEDGE FUND UNDER SCRUTINY BY SERIOUS FRAUD
OFFICE
Mayfair-based hedge fund Dynamic Decisions Capital
Management is being investigated by Britain's Serious Fraud
Office over concerns that some of its funds have suffered
significant losses. A former fund director has said that Dynamic
incurred the losses last year before going into liquidation in
May. This year, the company indicated that its main fund had an
unaudited net asset value of 550 million dollars. However, a
court petition filed in March suggested a figure closer to 20
million dollars. Several investors have complained to the SFO.
BRITISH GAS PROFIT RISE FUELS CONSUMER GROUPS' ANGER
Centrica has said that the residential arm of British
Gas is on track to make 541 million pounds this year, compared
to 379 million in 2008. The expected rise, which comes despite
customers consuming seven per cent less gas in the first three
quarters of 2009, angered consumer groups, who believe British
Gas should have passed on a 25 percent reduction in wholesale
energy costs in full. Robert Hammond, of watchdog Consumer
Focus, said that suppliers were ignoring consumers in fuel
poverty. Centrica defended its profits, saying it needed three
billion pounds to spend on new energy infrastructure.
Prepared for Reuters by Durrants
($1=.6033 Pounds)
Keywords: PRESS DIGEST British business Nov 13
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