PRESS DIGEST - British business - April 7

The Times

TESCO CHECKS OUT OF NATIONAL INSURANCE CAMPAIGN

Supermarket group Tesco (TSCO.L) has refused to lend its backing to a business campaign against a rise in national insurance. "We have all got a responsibility to make sure the nation emerges in good health from the world recession," said retail and logisitics director David Potts. "We have got to support whatever measures are considered to be right." Tesco is Britain's largest private employer and thought to be the country's biggest contributor of national insurance.

TEMPUS

Connaught CNT.L (Hold)

Endace (Hold)

Monitise (Buy)

The Daily Telegraph

UKFI URGED TO ISSUE LLOYDS AND RBS CONVERTIBLE BONDS

Bankers are urging UK Financial Investments, the independent government body responsible for administering the UK government's investment in banks Lloyds (LLOY.L) and Royal Bank of Scotland (RBS.L), to consider a convertible bond for the government's stakes in the banks before the general election in May. The deal to capitalise on the holdings had previously been thought to be at least six months away, but the suggestions that the deal be made earlier have been prompted by recent better-than-expected performance of the two banks' share prices. Both Lloyds and RBS are trading at close to the price that the UK government paid for them.

HIGHER TAX RATE 'WILL HIT PUBLIC FINANCES'

The Institute of Directors, the body representing company directors in the UK, has warned that the new 50 percent rate of tax on earnings over 150,000 pounds will result in lower tax revenues for the UK in the long-term. The IoD said the higher rate of tax will likely prompt people earning over the threshold to take advantage of tax-planning opportunities and will push many to relocate to other tax jurisdictions. The IoD also suggested that the new rate, effective since Tuesday, may cause multinational companies to move their headquarters out of Britain.

VERIZON BOSS COOL ON VODAFONE MERGER

The chief executive of U.S. telecommunications company Verizon Communications, Ivan Seidenberg, has said that there is "no compelling reason" for the U.S. company to merge with British mobile network operator Vodafone (VOD.L). Seidenberg also said that the two companies are constantly continuing talks about their strategic options. Vodafone owns 45 percent of Verizon Wireless to Verizon's 55 percent. However, Seidenberg added that new information may change his position. Vodafone has been pressuring Verizon to resume paying dividends since the U.S. company blocked payments in order to reduce its debt. Shares in Vodafone dropped 2 pence to 149.6 pence.

BARCLAYS FIGHTS FOR LEHMAN ASSETS

UK bank Barclays (BARC.L) is continuing its fight to retain assets worth 6.7 billion dollars that it allegedly received incorrectly when it purchased the collapsed U.S. bank Lehman Brothers. The Lehman Brothers estate is claiming in lawsuits that Barclays Capital, an investment banking arm of Barclays, received up to 11 billion dollars of assets incorrectly because the deal to buy Lehman was struck too quickly. Barclays Capital has complained that the trustee of the Lehman estate, James Giddens, is attempting to "disavow the terms of the deal", which secured 10,000 jobs and injected cash into the US economy.

QUESTOR

Antofagasta (ANTO.L) (Buy)

Petrofac (PFC.L) (Buy)

The Independent

VIRGIN LAUNCHES BID TO OUST FAVOURITE IN RBS BATTLE

The American tycoon Wilbur Ross has announced that he is prepared to provide as much as 500 million pounds in support of Virgin Money's attempt to purchase over 300 Royal Bank of Scotland (RBS.L) branches. Five companies are currently bidding for the branches, which are expected to fetch between one and two billion pounds and would give a buyer control of around five percent of the UK small business and mid-sized corporate banking markets. NAB and Banco Santander (SAN.MC) were the favourites to acquire the branches before the news of Ross' backing of Virgin.

SMALL SHOPKEEPERS FIGHT PROPOSALS

Research conducted for the Association of Convenience Stores, which represents 33,500 small shopkeepers, indicates that 85 percent of the public oppose a liberalisation of trading laws that would allow large retail chains to trade for longer on Sundays. The ACS stated that the current regulations assisted small retailers by encouraging local shopping in small stores on the Sabbath. Large retailers such as Topshop and House of Fraser have recently been lobbying the Business Secretary Lord Mandelson with requests to relax the existing laws.

ESPN WINS RIGHTS TO FOOTBALL HIGHLIGHTS ON MOBILES FROM SKY

The sports broadcaster ESPN has purchased the rights to show Premier League highlights on mobile phones in a blind auction for less than ten million pounds. ESPN announced that it has secured a package allowing it to show short form mobile highlights of every game for the next three seasons. Satellite broadcasting company Sky's (BSY.L) service, which it acquired from mobile operators Vodafone (VOD.L) and 3 two years ago, will be closed at the end of this season.

INVESTMENT COLUMN

M&S (MKS.L) (Sell)

Brightside (Buy)

Intertek (ITRK.L) (Buy)

The Guardian

UNIONS CALL FOR 'CADBURY LAW' MERGER CURBS

Unions have called for a "Cadbury law" to protect British businesses from aggressive foreign takeovers. The calls followed a report from an all-party committee of MPs, which found that U.S. foods group Kraft had acted "irresponsibly" during its takeover of UK confectioner Cadbury when Kraft closed a Cadbury factory that it had promised to keep open. It is expected that a Takeover Panel report in May will suggest only minor revisions to current regulations.

THREAT OF LEGAL ACTION OVER QINETIQ MOVE TO SLASH PAYOFFS

Unions are threatening legal action over plans to cut redundancy payments to workers at defence research group QinetiQ (QQ.L). The current redundancy policy at the formerly state-owned company caps payments at 160 weeks' pay. New chief executive Leo Quinn intends to cut the payouts to a maximum of 30 weeks' pay. Next month, Qinetic will announce a restructuring that workers fear will lead to the loss of up to 1,000 jobs. David Luxton, national secretary of the Prospect Union, which has been in negotiations with QinetiQ, said: "They are trying to negotiate with a gun to our heads. All these terms and conditions are written into individuals' contracts."