PRESS DIGEST - British business - March 16

The Sunday Times

ROLLS-ROYCE AND BAE IN SECRET PLEA TO DOWNING STREET

BAE Systems (BAES.L: Quote, Profile, Research, Stock Buzz) and Rolls-Royce (RR.L: Quote, Profile, Research, Stock Buzz) have asked the government to break with tradition and let them appoint a foreign chief executive. Britain's biggest aerospace and defence groups are holding talks with Downing Street and the Defence Ministy. BAE's need is more pressing because it is actively looking for a successor to Mike Turner, who stands down in August, according to a government source.

HSBC WEIGHS UP SALE OF RAIL ARM

HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) is contemplating the sale of its train-leasing division as it faces increasing pressure to offload non-core assets to raise cash following huge write-downs. Britain's biggest bank has already contacted potential buyers for HSBC Rail, including the infrastructure and private equity firms that expressed interest in buying Angel Trains. The value of HSBC Rail is estimated at 1.5 billion pounds. However, bankers say a significant proportion of this is likely to be debt.

HOTEL MERGER TALKS

Whitbread (WTB.L: Quote, Profile, Research, Stock Buzz) has been holding secret talks to merge its Premier Inn business with Travelodge in a move that would create a three billion pound hospitality giant. Whitbread and Dubai International Capital are thought to have been negotiating a deal in which Whitbread would acquire Travelodge, and DIC would acquire a bigger stake in the British group. According to Mintel, the market research firm, the budget hotel sector is one of the bright spots in the leisure industry and is growing three times faster than the rest of the hotel sector.

The Sunday Telegraph

ASDA CHIEF SAYS ALCOHOL TAX RISE "BLUNT INSTRUMENT"