The Mail on Sunday

BURBERRY IS WEATHERING THE STORM

Burberry looks set to reveal a drop in profit of around eight percent to 77 million pounds when it announces first-half trading figures on Tuesday. Analysts, who believe Burberry has handled the recession better than other luxury brands, expect the company to issue a confident statement. Burberry has been employing Harry Potter star Emma Watson to model its clothes.

NATIONAL EXPRESS BOSS THREATENS LEGAL FIGHT

National Express majority shareholder Jorge Cosmen has threatened to take legal action against other directors if they try to force him off the board. He has already indicated strong opposition to a proposed 360 million pound rights issue. National Express claims that the Cosmen family, who own an 18.5 percent stake in the company, will lose their board seat if they fail to subscribe to the rights issue. The Cosmens argue that this will not be the case, and say lawyers agree with their interpretation.

ASOS PROFITS SLOW AS THE COLD SETS IN

Asos, Britain's biggest listed fashion website, is predicted to reveal a 4.3 million pound reduction in first-half profits growth on Tuesday, fuelling fears that its business is in decline. However, its performance in the UK was offset by overseas sales, which doubled. Broker Seymour Pierce blamed the warm autumn weather for a reduction in demand for cold-weather fashion products. Retailers are also worried about the prospect of another four-day Debenhams Christmas sale, but its effect on the high street is likely to be less marked than last year

The Sunday Times

LLOYDS TAKES 600 MILLION POUNDS HIT ON ADMIRAL PUBS

Lloyds Banking Group has been forced to wipe out between 400 and 600 million pounds of Admiral Taverns' debt and write-off a 120 million pounds loss on interest-rate swaps. Lloyds will be forced to take control of the pub chain and is the latest fall-out from the bank's ill-fated merger with HBOS. Admiral's expansion was fuelled by an 850 million pound loan from HBOS. The news comes just days after Lloyds revealed it could lose an estimated 700 million pounds from the collapse of Kenmore Property Group.

BA TO ROLL OUT SHARES STRATEGY

British Airways will hold talks with the Civil Aviation Authority over the creation of a separate group that will own the majority of the airline's shares. The purpose of the "national control company" is to preserve BA's traffic rights and it will control 50.1 percent of the voting shares in the UK half of the newly merged BA/Iberia group. It will not be paid any dividends. Iberia will have a matching control company. BA's chief executive Willie Walsh reiterated his interest in acquiring Heathrow's second largest airline BMI.

BAKER IN 1.5 BILLION POUND MATALAN BID

The owner of Poundland, private equity group Advent International, is expected to make a 1.5 billion pound bid for Matalan. Richard Baker, the former boss at Boots and now operating partner at Advent, will spearhead the bid. Matalan's sale is expected to attract bids from several private equity funds including TPG, CVC and Blackstone. Industry experts are confident Advent can make a successful bid because of its experience of the discount retail sector. Advent has enough firepower to succeed after it raised 5.9 billion pounds last year.

SHAREWATCH:

Micro Focus (outlook for the company is good)

The Sunday Telegraph

'KRAFT'S OFFER SHOWED CONTEMPT'

The chairman of Cadbury, Roger Carr, said Kraft's 9.8 billion pound bid for the confectionery firm was "in contempt of the market's expressed view" because it was much lower than analysts' valuations. Several hedge funds have extended their positions in Cadbury as they judge that Kraft will have to make a higher offer to be successful. An analyst's note has been circulating among Cadbury shareholders that said an offer of nine pounds a share would get management and shareholders to reconsider. The original offer valued the company at 718 pence.

EGG PRODUCER SET TO LAY OUT 35 MILLION POUNDS FOR GU

Britain's biggest egg producer, Noble Foods, is believed to be in exclusive negotiations to acquire Gu, the upmarket pudding maker, in a deal said to be worth 30 to 35 million pounds. Noble is believed to have fought off some stiff competition and is likely to keep Gu as a stand-alone business. Gu was set up six years ago and now supplies its puddings to Virgin Atlantic. The company.

EASYJET SET TO HIT PROFIT TARGETS

Analysts expect EasyJet to post pre-tax profits for 2009 of 43-44 million pounds, just days after British Airways merged with Iberia in a deal that Ryanair's Michael O'Leary described as "two drunks.holding each other up on the way home." Charles Stanley's Tony Shepard said EasyJet had done well in the current economic climate when most carriers are reporting losses. He forecast that EasyJet's profits in 2010 would rebound to hit 160 million pounds. This year's profit figure was down on last year's 110 million pounds following a 90 million pound first-half hit from increased fuel costs

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SUNDAY QUESTOR:

Electrocomponents (buy)

Galiform (take profits)

The Independent on Sunday

KENMORE'S FAILURE BLAMED ON THE TROUBLES OF GERMAN LENDER

According to property sources, Kenmore Property Group was forced into administration by a repayment demand from troubled German lender HSH Nordbank, and not by the actions of Lloyds Banking Group. HSH is believed to have demanded repayment of an estimated 300 million pounds in loans as it undergoes restructuring of its balance sheet. This demand is understood to have forced Lloyds' hand by its demand for immediate repayment as it undertakes measures to resolve balance sheet issues.

NEW CHIEF LAUNCHES REED REVIEW

Erik Engstrom, the new chief executive of Reed Elsevier, is launching a review of the business which is set to last for at least six months and could lead to asset sales. Engstrom replaces Ian Smith, who left after only eight months in the top job. Reed wanted to sell its business information unit last year, but bids failed to meet the target price and Smith decided not to put the division back up for sale. According to insiders, Engstrom now has "carte blanche" to review the business. Reed closed down 0.7 per cent at 468 pence on Friday.

LAST-GASP CASH KEEPS AIRLINE FLYING - FOR NOW

A last minute cash injection at Scottish airline Flyglobespan is believed to have held off its collapse. Contingency plans to repatriate passengers had already reportedly been drafted and administrators appointed, but Globespan Group directors were able to secure last-minute funding. Flyglobespan made a 1.2 million pound profit in 2008 and won an industry award last month, but is believed to have hit financial problems when payments from credit card processing company E-Clear were delayed. Globespan Group offered no comment on the developments.

The Observer

RBS ATTACKED FOR BACKING CADBURY BID

A coalition of MPs and unions has criticised RBS for lending 630 million pounds to Kraft's takeover bid for Cadbury. Unite, which represents Cadbury workers, questioned RBS's support for Kraft, which has so far failed to rule out plant closures and job losses. Labour MP Khalid Mahmood has called for an investigation into how the taxpayer-funded bank is being allowed to lend to a company that may initiate mass UK redundancies if it wins the bid. RBS has also been criticised by anonymous City bankers who claim it is buying up loans from foreign banks to meet Government targets.

JOHN LEWIS GREETS CHRISTMAS WITH THE GIFT OF GUNS N' ROSES

John Lewis has chosen a cover version of Guns N' Roses' 1988 anthem "Sweet Child o' Mine" to back its Christmas TV advertising campaign. The first advertisement, featuring a version of the song recorded by Swedish folk group Taken By Trees, will air during the X Factor on Sunday. John Lewis has spent five million pounds on the campaign, but has been able to buy the same amount of media space as last year due to a decline in the cost of advertising.

WHISKY RULING COULD CLOSE ECO-DISTILLERY

New rules defining how traditional malt whisky is made could mean that an environmentally friendly distillery may be forced to cut jobs and scrap energy-efficient production methods. The Loch Lomond distillery, which produces over 20 million bottles of High Commissioner whisky a year, could be affected by plans to restrict the classification of Scotch malt whisky to whisky made "by batch distillation in pot stills". John Peterson, distilling director at Loch Lomond, criticised politicians for sending mixed messages about climate change, but the Scottish Whisky Association defended the new rules.

Prepared for Reuters by Durrants

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