Sunday November 15, 04:15 AM
Glance-PRESS DIGEST - British business - Nov 14
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 (LSE: NEX.L - news) 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 (LSE: ASC.L - news) , 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 (LSE: LLOY.L - news) 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 (LSE: ADM.L - news) '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 (LSE: BAY.L - news) 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 (Madrid: IBLA.MC - news) 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 (LSE: AB.L - news) 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 (NYSE: BX - news) . 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 (LSE: MCRO.L - news) (outlook for the company is good)
The Sunday Telegraph
'KRAFT'S OFFER SHOWED CONTEMPT'
The chairman of Cadbury (LSE: CBRY.L - news) , 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 (LSE: EZJ.L - news) 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 (Dublin: RY4.IR - news) '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
.
SUNDAY QUESTOR:
Electrocomponents (LSE: ECM.L - news) (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 (Amsterdam: REN.AS - news) , 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 (LSE: RBS.L - news) 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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