PRESS DIGEST - British business - July 14

The Times

THE CO-OP READY TO RECAPTURE THE MAGIC OF THE SIXTIES WITH 1.6 BILLION POUND SOMERFIELD DEAL

The Co-operative Group is close to finalising its long-awaited 1.6 billion pound takeover of Somerfield, its springboard back into the supermarket big league. The deal would trigger windfalls for property tycoon Robert Tchenguiz, who holds a 30 percent stake in Somerfield, as well as his fellow shareholders Barclays Capital, Apax and Kaupthing, the Icelandic bank. Somerfield's 900 stores would take Co-op's portfolio of supermarkets and convenience sites to more than 3,100 and bring the enlarged group annual sales of more than 10 billion pounds.

QINETIQ WINS BOEING CONTRACT TO DEVELOP UNMANNED AERIAL VEHICLES FOR PENTAGON

British defence research company QinetiQ (QQ.L) has won a key contract with Boeing to develop unmanned aircraft for the U.S. government. It will announce on Monday that Boeing (BA.N) has chosen QinetiQ for the project for the U.S. Defence Advanced Research Projects Agency to develop Vulture, a pilotless endurance vehicle for use in civil and military applications that could eventually replace conventional satellites. QinetiQ has previously developed a solar-powered UAV prototype called the Zephyr, an unmanned ultra-lightweight aircraft which is launched by hand.

CBI DEMANDS PLANNING CHANGES TO AVOID ENERGY AND TRANSPORT CRISES

The Confederation of British Industry has said Britain's energy security and the 100 billion pounds of commercial money needed to deliver it could be jeopardised should the Planning Bill fail to become law. It also believes that if the present planning system is allowed to continue the economy will be further hit by obstacles to the development of the transport network. The bill, which faces its second reading in the House of Lords on Monday following a difficult passage through the Commons, would greatly simplify the planning process for large infrastructure projects.

The Daily Telegraph

PETROFAC PLANT BID

Petrofac (PFC.L), the British-based oil and gas services provider, is part of a consortium with Indonesian engineering company IKPT that is the preferred bidder to build a liquefied natural gas plant in Algeria. The plant, to be constructed in the western Mediterranean port of Arzew, will have a production capacity of 4.3 million tonnes a year.

EQUITABLE LIFE DRAWS UP BIDDER SHORTLIST

Equitable Life, the UK's oldest mutual insurer, is being circled by a pack of insurance giants, including Legal & General (LGEN.L)> and Prudential (PRU.L) The former insurance leader, which at its peak had 1.5 million policy holders and was worth 26 billion pounds, has drawn up a shortlist of bidders for its remaining seven billion pound assets. The "serious contenders" are now working on revised offers and Equitable hopes to decide whether to sell itself in the autumn, sources close to the process said.

SIX PRIVATE EQUITY FIRMS GO TO NEXT STAGE OF BODYCOTE AUCTION

Half a dozen private equity bidders -- CVC Capital Partners, Montagu, Warburg Pincus, CCMP Capital, Providence Equity Partners and Clayton, Dubilier & Rice -- have made it through to the second round of the auction for the testing business of engineering group Bodycote (BOY.L), it has emerged. There are rumours that a trade buyer had also made it through to the second stage, banking sources said. Bodycote's shares closed 7.75 pence down on Friday at 174.5 pence, valuing the group at 586.2 million pounds.

The Independent

FUNDING CRISIS FORCES DAWNAY DAY TO CALL IN ADMINISTRATORS