PRESS DIGEST - British business - June 22

Monday June 22 2009

The Times

ANGLO AMERICAN RAISES DEFENCES AS XSTRATA SEEKS 41 BILLION.

The mining company Xstrata has made a merger offer to its contemporary Anglo American. However, Anglo's board is not believed to be as keen on the potential deal as Xstrata and took care to stress that the potential tie-up "is at a very preliminary stage . there is no certainty that any transaction will be forthcoming". The board is now expected to attempt to persuade shareholders, who may have a more positive attitude to a merger, that the best option would be to remain independent.

HOUSE PRICES FALL IN JUNE, BUT STILL FIRST-TIME BUYERS CANNOT.

Data from the property website Rightmove (RMV.L) has shown a fall of 0.4 per cent in house prices across the UK during June. This decline, coming after four consecutive monthly gains, has been blamed on rising mortgage rates, which mean many potential homebuyers are unable to find the money to secure home loans. "Property deals appear within the grasp of cash-stapped first-time buyers," said Miles Shipside of Rightmove. "But every rise in fixed rates frustratingly nudges them a bit further out of reach."

RBS TO SOAK UP WIMBLEDON ATMOSPHERE WITH SALMON, CHEESECAKE.

Royal Bank of Scotland's (RBS.L) decision to spend 300,000 pounds on corporate hospitality at Wimbledon has been criticised by many, particularly following the bank's shedding of thousands of jobs and its partial nationalisation. Criticism has been levelled at the bank staff and customers effectively receiving luxurious days out at the tennis courtesy of the taxpayer. An RBS spokeswoman responded that the hospitality package was part of a long-term deal and it would be mainly bank customers, rather than staff, who would be attending. She added that the bank had cut its hospitality by 90 per cent.

The Daily Telegraph

UBERIOR FORCED TO WRITE OFF 250 MILLION POUNDS

Uberior Investments has plunged into the red, having been forced to write-off more than 250 million pounds off the value of its investments. The write-offs by the private equity arm of HBOS HBOS.L were revealed in accounts filed at Companies House and also show an 80 million pound loss, compared to a 518 million pound profit the year before. Notes to the investment vehicle's accounts reveal that the group now rates 15 per cent of its debt securities "high risk".

YELL CHIEF EXECUTIVE GIVES UP ONE MILLION POUND BONUS.

John Condron, chief executive of Yell (YELL.L), has waived a bonus of 935,000 pounds after a programme of 1,300 job cuts last year. The directories group was forced to admit last month that it is considering a rights issue and an earlier-than-expected refinancing of its 4.2 billion pound debt. The group's finance director, John Davis, also gave up a bonus which totalled 555,000 pounds in 2007. The remuneration committee said the directors had given up the rewards of their own accord.

SUPPLIERS WARY OF PUNCH'S 4.5 BILLION POUND DEBT

Punch Taverns (PUB.L) has been forced to admit that its suppliers are having difficulty obtaining credit insurance because of the pub operator's substantial debt burden. The UK's largest pub operator, with more than 8,000 licensed premises, launched a 350 million pound placing last week to enable it to make repayments, while the prospectus of a 50 per cent placing and 50 per cent offer of new shares at 100 pence spell out the difficulties. Punch noted that the perceived risk of supplying it could have a knock-on effect that would drive up its costs.

The Independent