PRESS DIGEST - British Sunday business - July 19

The Mail on Sunday

STOBART IN TALKS OVER RAIL FREIGHT TERMINALS

Eddie Stobart is in talks with Network Rail concerning plans to build freight terminals on its dormant land. Chief executive Andrew Tinkler said the transport and logistics group was working with the owner of the rail system to find redundant land or line where it could build terminals. Its first target is the Midlands Main Line, part of Stobart's plan to shift ten per cent of its freight to rail by next year.

HAT TRICK ALERT OVER SIX MILLION POUND DEBT

Deloitte, the auditor to independent television company Hat Trick Productions, has sounded the alarm over a six million pound of debt. It warned the debt, payable at a moment's notice to private equity firm August Equity, 'may cast significant doubt' over the future of the firm's hit TV shows. Hat Trick's finance director Andy Dugdale said: 'They have not demanded payment and we do not expect them to do so. If they did, we are confident we could raise the finance.'

HUGE OIL FIND IS SET TO LIFT THE VALUE OF TARGETED VENTURE

The oil and gas company Venture ProductionsVPC.L is likely to find a vast area of oil and gas reserves equivalent to 44 million barrels in the North Sea this week. The company is presently the subject of a 1.3 billion pound bid at 845 pence per share from Centrica(CNA.L), owner of British Gas, which has a 29.9 percent stake in the business. The Venture board could argue its value is much higher than Centrica's bid if the amount of resources proves to be as large as expected.

Sunday Times

GLAXO TALKS TO 30 GOVERNMENTS FOR SWINE FLU JAB

The drug manufacturer GlaxoSmithKline(GSK.L) is in negotiations with up to 30 different countries about supplying them with a vaccine for swine flu. The company expects to be able to begin shipments by September and has ordered plants in Canada and Germany, which usually produce vaccines for regular influenza, to switch to the swine flu antidote. Several hundred million doses are expected to be necessary, meaning large profits for Glaxo. The chief executive, Andrew Witty, may give a more exact figure of the number requested by various governments when the company publishes its second-quarter results this week.

LLOYDS TO STUN CITY ON PROFIT

Fair value accounting rules, where paper gains flow straight through to a company's bottom line, may mean that Lloyds Banking Group(LLOY.L) will make a headline profit for the first half of 2009 despite around 13 billion pounds of bad debt provision. The price of many distressed assets held by Lloyds has rallied in recent months. The bank's operating profits of seven billion pounds, combined with the accounting write-backs, could well outweigh the bad debt charges still being levied on Lloyds' exposures to mortgages, corporate loans and commercial property.

ASHLEY HEATS UP WAR AGAINST SPORTS RIVAL

The owner of Sports Direct(SPD.L) Mike Ashley plans to report Sir David Jones, executive chairman of Sports Direct's rivals JJB Sports, to the Financial Services Authority for giving inaccurate information to the London Stock Exchange about a 1.5 million pound personal loan presented to Jones by Ashley. Ashley claims that the loan was initiated in October 2007 after Jones joined the board of JJB on the first of October. This raises questions of a conflict of interest given that the two companies are not only rivals but also have a close relationship involving stock trading.

SHAREWATCH

Moneysupermarket.com(MONY.L) ("Could be worth a punt")

Sunday Telegraph

TOP BARCLAYS DEALMAKER QUITS FOR NEW VENTURE

The Sunday Telegraph has learnt that Roger Jenkins, the Barclays(BARC.L) executive who secured billions of pounds in funding to help the bank remain free from direct government investment, is gearing up to leave the company to set up an advisory business specialising in helping sovereign wealth funds and other cash-rich institutions on acquisition deals and other corporate activity. Jenkins is said to be in talks with senior colleges regarding the terms of his departure and it is rumoured that an announcement could be made as early as next week.

OH, YES! AD GROUP SEEKS 50 MILLION POUNDS FOR EXPANSION

The Engine Group is seeking a 50 million pounds investment to fund an international expansion plan that will see it expand further into the US and the Far East. The advertising agency has appointed advisers from the investment bank Jefferies and the corporate finance arm of Ingenious Media to secure funds through either a private placing of shares or a stock market listing.

HESTER COURTS BRUSSELS IN BID TO AVOID FIRE SALE

RBS(RBS.L) chief executive Stephen Hester has had an informal meeting with European Commission officials in an attempt to pre-empt any ultimatum from Brussels that would lead to a forced sale of the bank's assets under competition rules. Hester travelled to Brussels last week to present details of his recovery plan and to ensure EC staff would include substantial disposals. Neelie Kroes, The EU competition commissioner, suggested last month at a British Bankers' Association conference she would push for a restructuring of RBS: "The massive aid received by banks such as Lloyds(LLOY.L) and RBS allows banks to remain leaders in the markets which are concentrated. The likelihood of significant divestments by RBS and Lloyds is strong" she said.

QUESTOR

Electrocomponents [Buy]

Pennon(PNN.L) [Buy]

Randgold Resourses(RRS.L) [Buy]

Independent on Sunday

ALCONTROL APPOINT ADMINISTRATOR

The Flintshire food testing business ALcontrol Laboratories has appointed Zolfo Cooper as its administrator if talks with its creditors do not achieve an extension in loan terms and the company is placed in pre-pack administration. For Candover Investments(CDI.L), the buyout group which owns ALcontrol, this ominous sign is another setback following the write-offs of several of its portfolio companies during the credit crunch. Candover was forced into raising 553 million pounds last month by selling the energy and research consultant Wood McKenzie to Charterhouse Capital.

OFWAT DEMANDS THAMES WATER REDUCES PLANNED PRICE HIKE

The water companies' regulator Ofwat is to tell Thames Water to reduce its planned price increases, in its five-year review which will be published on Thursday. Thames supplies 13.6 million households in Southern England and has requested regulatory approval to increase its prices by 17.2 per cent above inflation over the period to 2015, including a ten per cent price increase next year. Other suppliers have also asked to increase their prices including South West Water who asked for an 8.9 per cent rise in water bills.

UNITED UTILITIES' GREEN READY TO SELL ASSETS

The UK's largest listed water company, United Utilities(UU.L), is considering selling assets not regulated by the water industry Ofwat. These include a meter installation contract with British Gas Trading(BG.L), a water facilities upgrading contract in Australia as well as the company's operations in Bulgaria, Estonia, Poland, and the Philippines. According to one City source; "there could be a sale process as early as September, with the assets fetching around 800 million pounds". The reasoning behind such a sale is not clear but chief executive Philip Green has previously made sales to clean up the fragmented business and return cash to shareholders.

The Observer

EX-LEHMAN TRADERS TO GET HUGE BONUSES

Barclays(BARC.L) is to pay tens of millions of pounds to its investment bankers, with some of the biggest payouts going to former Lehman Brothers traders hired by Barclays after it took over Lehman's US operation. The bonuses to bankers who have made huge profits from trading in government debt, derivates and foreign exchange are likely to spark outrage among Barclays' UK employees, who are being balloted by the Unite trade union on strike action over pension scheme cuts and job losses.

SPOTIFY TO TAKE ONLINE JUKEBOX TO THE STATES

Spotify is to recruit staff for an imminent assault on the US music scene, despite admitting that it may not meet its often-stated goal of making a profit by the end of 2009. The online music streaming service, which has more than two million users in Europe, has been in talks with record labels about extending Spotify's European licensing deals to stream music in the US market. Spotify will also shortly launch a mobile phone version of its service in a move viewed as crucial by analysts.

CALEDONIA SET FOR REVOLT ON PLAN TO DONATE TO THE TORIES

Caledonia Investments(CLDN.L) has been criticised by Pirc, the shareholder lobby group, for proposing to donate 75 thousand pounds to the Conservative party. Pirc is recommending investors block a resolution at the annual meeting that would allow Caledonia to make political donations. In a resolution, to be put before investors, Caledonia says "the board strongly believes the hard decisions that need to be made to sustain economic recovery require the return of a Conservative government."

Prepared for Reuters by Durrants