PRESS DIGEST - British business - Jan 31

Independent on Sunday

SOLARCENTURY CONSIDERS LISTING

According to a source close to Solarcentury, the renewable energy company is considering a flotation on the London Stock Exchange. A listing of the company founded by green campaigner Jeremy Leggett could value the solar technology provider at up to 100 million pounds, according to an estimate from an industry expert. The company currently has a turnover of 35 million pounds and is believed to be considering the flotation for later this year to take advantage of "feed-in tariffs" due to be detailed in a government announcement next week that will allow consumers to sell surplus energy to the national grid.

SERCO HOPES TO WIN CYPRUS BID

The FTSE-100 services group Serco (SRP.L) is believed to be the front-runner to win a 200 million pound contract from the Defence Ministry to provide support services to British servicemen in Cyprus. The award of the contract, dubbed Project Wavell, is due to be announced on February 19 afterg a three-year bidding process. Lanmarc, a joint venture between UK-based Interserve (IRV.L) and American firm CSC, and the FTSE-250 company VT VTG.L has also submitted tenders for the contract.

TOPLAND TO SHOP FOR CHEAP PROPERTIES

Real estate investor Topland Group has set aside an estimated 200 million pounds to buy properties that owners are desperate to sell. The London-based group has been purchasing distressed commercial property loans at a significant discount for the past 18 months. Topland's director of structured finance Tom Betts said: "We're ready to provide equity as well as asset management services." The group's current investments include department stores let to retailers and five office blocks in the City of London.

INDIAN MINER TO LIST UP TO SIX SPIN-OFF FIRMS

Vedanta Resources (VED.L), the predominantly Indian-based mining group, is considering plans to spin off several of its interests, resulting in five or six companies plus a parent organisation. Vedanta would retain a controlling interest in the subsidiaries but each would be listed separately. A number of leading mining bankers in London have been asked to examine proposals for the listings. Some potential advisers believe that most of the listings will end up on the Hong Kong and Indian stock exchanges, as the spin-offs could not place on the London Stock Exchange due to the parent company being a FTSE 100 company.

The Observer

NEW ITV BOSS FACES BREAK-UP BID BY REBEL INVESTORS

A group of shareholders in British broadcaster ITV (ITV.L) are attempting to pressure the company into splitting off the production arm from the broadcasting operations in order to increase the value of the company. They have presented their proposals to recently appointed chairman Archie Norman and are attempting to secure a meeting with new chief executive Adam Crozier as soon as possible. ITV Productions has seen its share of network output decline over the past five years, as some of ITV's most blockbusting programmes are made by independent companies. Norman and Crozier are expected to resist the split.

Mail on Sunday

INGENIOUS INVESTORS HIT BY BIG TAX BILLS

Investors in media investment group Ingenious Media (IMAC.L) have received tax demands for tens of thousands of pounds. The bills relate to tax relief claimed on investments for the year 2003/04 and it is thought that partners on Ingenious' Inside Track investment fund could be affected. It is understood letters from HM Revenue and Customs say the partners were not entitled to offset their share of the fund's trading losses against other income as the partnership was not trading on a commercial basis. Ingenious is expected to dispute HMRC's assertion.

HUNTRESS HANDS OVER SHARES TO REDUCE DEBT

White-collar recruiter Huntress Group has struck a deal with Barclays Ventures that will see the private equity firm become Huntress' major shareholder in return for writing off 28 million pounds of Huntress' 40 million pound debt. The deal will also see Gary Laurence, who led a 2007 management buyout of the recruiter from Graphite Capital, step down as chief executive. Revenue and profits at Huntress fell last year as FTSE 100 firms cut back on recruiting, and the board began restructuring talks with Barclays in December.

Sunday Times

PREMIER'S CHAIRMAN IS EXPECTED TO STEP DOWN

Premier Foods (PFD.L) chairman David Kappler is expected to stand down at the group's annual meeting this year. An announcement is expected as early as next week, with headhunters to be appointed to search for a replacement. Premier, which owns the Hovis and Mr Kipling brands, has seen 14 percent wiped off its market value in the past two weeks after a trading update warned that profits would be at the bottom end of analysts' forecasts. Sources close to Premier said Kapler's departure was voluntary and did not come as a result of shareholder pressure

1.7 BILLION POUND BID FOR WATER GROUP

Canadian pension fund the Ontario Teachers' Pension Plan is preparing to launch a 1.7 billion pound bid for British water group Northumbrian Water NWG.L. The fund owns 27 percent of the utility company but has been seeking an opportunity to make a full takeover for some time. It is choosing to make its move after UK water industry regulator Ofwat set out pricing and spending limits for water companies which affect Nothumbrian's competitors. The bid is unlikely to include a large premium as the fund's current holdings in the company decreases the likelihood of competition.

LOVERING EYES DFS BID WITH PERMIRA

Retailer John Lovering has teamed up with European private equity firm Permira to launch a buyout bid for UK furniture group DFS. Lovering has recently been installed as chairman at pub group Mitchells & Butlers (MAB.L) after the previous chairman was ejected by shareholders. Lovering and Permira have appointed Japanese bank Nomura to advise on the deal. The owner of DFS, Lord Kirkham, is considering selling a majority stake in his furniture retailer, valued in excess of 500 million pounds, as he approaches retirement. Other parties expected to make bids include private equity firms Cinven and Advent International.

SHAREWATCH

Anglo American (AAL.L) (If business slows, pressure on the business to cut costs will return)

Sunday Telegraph

RBS UNVEILS AUCTION FOR WORLDPAY

A substantial number of businesses have expressed an interest in acquiring Royal Bank of Scotland's (RBS.L) payments operation Global Merchant Services. A total of 45 different parties have contacted RBS about the sale of GMS, which is valued at two billion pounds and must be sold in order for the partially state-owned bank to comply with European Commission rules on state aid. Interested parties include the private equity firms Silver Lake Partners, Kohlberg Kravis Roberts and Advent International. The deadline for informing RBS of an interest in GMS is Wednesday.

MORE GLAXO JOBS AT RISK IN INDUSTRY SHAKE-UP

British employees of the pharmaceutical company GlaxoSmithKline (GSK.L) are anticipating thousands of job losses. The company is believed to be pursuing further cost-cutting measures that could add to the 1.7 billion pounds of potential savings it has already identified. The main cuts are likely to hit the business' R&D operations the heaviest, as GSK attempts to respond to increasing generic competition to some of its most lucrative drugs.

PLAN TO SELL MATALAN MAY BE DERAILED

The planned sale of the discount fashion chain Matalan [MTLAN.UL] looks unlikely to raise the sum in excess of 1.5 billion pounds originally hoped for by its owner John Hargreaves. The American private equity firms TPG, Advent International and possibly Warburg Pincus are expected to make offers by Friday's deadline, but all three are wary of paying too much for Matalan. Hargreaves is believed to have inserted a clause in the deal specifying a "break price" of between 1.2 billion pounds and 1.25 billion pounds, entitling him to refuse to sell the business.

SABMILLER MULLS ARGENTINE BREWER DEAL

The UK-based brewer SABMiller (SAB.L) is thought to be planning a takeover bid for the German-owned brewer Isenbeck, which operates in South America. SAB may be hoping to revive its strategy of aggressive expansion, which suffered a setback earlier in January after Heineken beat it in a bidding war for the Mexico's Femsa Cerveza. The company already owns brewing operations in Ecuador, El Salvador, Honduras, Panama and Peru, which contribute 30 percent of its total revenues.

SUNDAY QUESTOR

ENRC (ENRC.L) (Buy)

Vodafone (VOD.L) (Buy)

Prepared for Reuters by Durrants.