PRESS DIGEST - British business - June 15

Tuesday June 15 2010

The Times

US PENSION FUNDS SUE BP CHIEFS OVER SHARE PRICE FALL

Fifteen directors of oil and gas firm BP (BP.L) are being personally sued by two US pension funds for damaging the company's value by allegedly allowing "a culture to develop where safety was not a priority", resulting in the recent Deepwater Horizon oil spill disaster. A sell-off of shares in BP has been intensified following comments made by U.S. President Barack Obama about the cost to the company of cleaning up the disaster. BP's total worth has fallen by nearly half to 66.8 billion pounds ($97.90 billion) from the 125 billion pounds that it was valued at before the disaster began in April.

REGULATOR CALLS SIR FRED TO ACCOUNT OVER RBS UNRAVELLING

The former chief executive of Royal Bank of Scotland (RBS.L), Sir Fred Goodwin, has been summoned by financial regulator the Financial Services Authority to answer questions about the bank's management before it nearly collapsed in October 2008. Goodwin is one of several former RBS board members being interviewed by the FSA in its investigation of the bank's financial dealings. The FSA last month banned former RBS head of investment banking, Johnny Cameron, from occupying most positions in a regulated firm, as part of a settlement that did not require him to pay a fine or admit wrongdoing.

COWDERY GOES IT ALONE TO CUT BANKS' FEES

Clive Cowdery's investment vehicle Resolution (RSL.L) is said to be close to finalising a 2.75 billion pound takeover of the UK life business of French insurance group AXA (AXAF.PA). The deal will be funded by a rights issue with a pioneering kind of underwriting, where Resolution shareholders will act as a coordinated group of sub-underwriters. This will decrease the risk to which investment bank underwriters, Barclays Capital (BARC.L) and Royal Bank of Canada (RY.N) in this case, will be exposed and correspondingly decrease the fees that they will charge. Full details of the rights issue and the acquisition are expected before the end of June.

SHAREHOLDERS PLUG INTO GRID FUNDRAISER

Utilities company National Grid (NG.L) announced on Monday that shareholders representing 94.2 percent of the company voted in favour of a 3.2 billion pound rights issue that was raised to increase investment in the company and stabilise its debt. NG offered two new shares at 335 pence for every five shares held, on a day when the share price stood at 620 pence. Prices closed at 507 pence on Monday. NG has pledged to increase its dividend by eight per cent a year for the next two years.

TEMPUS

888 Holdings (888.L) (Avoid)

United Utilities (UU.L) (Tuck away)

Hamworthy HMY.L (Hold)

The Daily Telegraph

BA LAUNCHES PRIVATE JET SERVICE IN U.S.

British Airways BAY.L is to introduce a private jet service in North America and the Caribbean for its wealthiest passengers, following the refusal of US regulators to allow it to operate domestic flights in the country or acquire an American airline. The scheme is a joint venture with CitationAir, private jet subsidiary of the Cessna Aircraft Company, and will only be available to those who have flown with the airline in the past year, members of the BA executive club programme, and employees of the carrier's corporate clients.

WEIR SALES BOOSTED BY OIL AND GAS

The engineering group Weir (WEIR.L), which has benefited from an increase in activity in the mining, oil, and gas sectors, now expects to report a first-half pre-tax profit of about 140 million pounds. The company has performed well during 2010, with the order input for the 22 weeks to June 4 jumping 25 percent compared with the same period in 2009. Weir also revealed that it had purchased Linatex, a Malaysian business which provides wear-resistant rubber products to the mining industry.

LORD YOUNG TO REVAMP OFFICE SAFETY RULES

The British Chambers of Commerce and the Federation of Small Businesses have both made positive comments regarding the government's attempts to curb overly restrictive health and safety laws. A review on health and safety legislation was begun for the Conservative Party by Lord Young of Grantham in December 2009 and its findings will be reported this summer. Young will then work with Whitehall departments to put the report's recommendations into place.

QUESTOR

Mothercare (MTC.L) (Buy)

Cineworld (CINE.L) (Buy)

The Independent

RETAILERS URGE MINISTERS TO STOP EXCESSIVE CARD CHARGES

The British Retail Consortium has urged the government to remain true to its promise of fighting "irresponsible banking" by cracking down on disproportionate charges on credit and debit card transactions imposed on retailers by banks. The BRC cites its own figures, which show that accepting debit card payments costs retailers four times more than accepting cash, with credit cards being 16 times more expensive than cash transactions. The consortium also expressed its concerns that banks intend to make higher debit card charging the norm, due to the introduction of new technology such as contactless and mobile payment methods.

POSEN: BANK MUST RESUME EASING POLICY IF NEEDED

Adam Posen, newest member of the Bank of England's Monetary Policy Committee, has spoken in favour of reintroducing quantitative easing and dismissed concerns that such a step would mean that the bank was compromising its independence. "Deeds matter, not institutional appearances," Posen remarked, before stating that the real measure of a central bank's independence was its ability to refuse demands for bond purchases.

INVESTMENT COLUMN

Weir Group (WEIR.L) (Buy)

3i Group (III.L) (Hold)

SuperGroup (SGP.L) (Buy)

The Guardian

ABOLITION OF HIPS BRINGS SURGE OF HOUSES TO MARKET

Professional body the Royal Institute of Chartered Surveyors has claimed that the government decision to abolish home information packs, a collection of documents and certificates containing details of a property being sold, has caused an increase in the number of homes being offered for sale. RICS reported that 22 percent more of its members saw a rise in house prices after the decision than saw a fall. RICS spokesman Ian Perry said: "Surveyors are generally confident that sales will continue to pick up over the summer months." ($1=.6823 Pound)