PRESS DIGEST - British business - Oct 2

The Times

WHOLESALE PRICE OF ELECTRICITY SURGES AMID FEAR OF SUPPLY SHORTFALL

Wholesale electricity prices rose higher on Wednesday amid growing concern over the prospect of a supply shortfall in November. The forward price of electricity for November reached highs of 133 pounds per megawatt hour, ten pounds higher since Friday. The price of power has surged following the National Grid's (NG.L) predictions last week that there would be an unusually slim margin between electricity supply and demand. Andrew Horstead, of energy consultants Utilyx, warned that the market is "very close" to its safety limit. National Grid denied that domestic consumers faced blackouts next month, but Horstead pointed out that the unexpected loss of a plant could result in temporary power cuts for industrial customers.

PUT SIMPLY, WAITROSE DISHES UP COMPETITION FOR M&S

Waitrose is set to introduce a new convenience store format in a challenge to Marks & Spencer's (MKS.L) Simply Food business. The group plans to open hundreds of small stores in town centres, railway stations and airports across the country, with the first scheduled to open in Nottingham this December. Mark Price, managing director of Waitrose, explained that the new stores would have the feel of a "real old-fashioned grocer" and would bring quality food back to the high street. The group plans to double the size of its business over the next nine years and is preparing to open its first international store in Dubai.

HBOS SHARES RISE BY 21 PERCENT AS HEAVYWEIGHT INVESTORS GET BEHIND 'DEAL OF THE CENTURY'

Standard Life Investments (SL.L) signalled support for the 12 billion pound rescue takeover of HBOS HBOS.L by Lloyds TSB (LLOY.L) on Wednesday by saying it would vote to give the deal the go-ahead in its current form. The development came as shares in HBOS surged 21 percent higher to 148.1 pence and Lloyds benefited from a ten percent boost to 250 pence. The share price movement reduced the discount at which shares in HBOS compare to the value of Lloyds' offer from 35 percent to 29 percent. Analysts reasoned that the gap still indicated that there were significant doubts that the deal could be completed under the terms stipulated two weeks ago.

The Daily Telegraph

REGULATOR SHOULD BE SPLIT, BA TELLS AIRPORT INQUIRY

In its submission to the Competition Commission, British Airways (BAY.L) has called for the Civil Aviation Authority to be split up and for more constraints to be placed on BAA to prevent it loading more debt onto Heathrow. The airline has also called for a restructuring of how owners of regulated airports get paid. Paul Ellis, BA's general manager of infrastructure policy and economic regulation, argued that the CAA's remit as a safety regulator is influencing its behaviour as an economic regulator: "There's a case, we believe, for a stand-alone economic regulator".

SINCLAIR PHARMA HAILS FIRST PROFIT

Sinclair Pharma (SPH.L) has reported a full-year pre-tax profit for the first time in its history. Profit before tax rose from a loss of four million pounds in 2007 to 1.9 million pounds. Chief executive Michael Flynn said the group would target German acquisitions and would be looking to establish itself in the U.S.

ST MODWEN FALLS TEN PERCENT ON WARNING

Shares in property developer St Modwen (SMP.L) fell almost ten percent on Wednesday after its management warned that the residential land market was "virtually non-existent" and that it was not expecting it to recover for some time. The group explained that cash management and cost control would be prioritised and that it would endeavour to remain within its banking covenants.