PRESS DIGEST - British business - July 12

The Sunday Times

COWDERY IN BID FOR FRIENDS PROVIDENT

Clive Cowdery has proposed a merger between Friends Provident (FP.L) and his quoted investment vehicle Resolution (RSL.L) (RSL.L). It's understood it is an all-share deal with a small premium on Friends Provident's shares which closed on Friday at 60 pence. It's thought Friends Provident will reject the approach, but if it is successful it could kick-start the long-waited consolidation within the sector. According to recent results, Resolution spent four million pounds on due diligence on possible deals in the first three months of the year having held extensive takeover talks with several parties, but there have been no formal approaches.

LLOYDS BRACED FOR THIRTEEN BILLION POUND WRITEOFF

Lloyds Banking Group (LLOY.L) is set to write off an estimated 13 billion pounds on loans to commercial property, business and mortgage holders. Analysts at UBS expect the bank to announce a bottom line half-year loss of 6.3 billion pounds. Lloyds is under pressure from Brussels amid threats it will be broken up, but analysts are keen to stress that if these provisions are put to one side, the bank is highly profitable and enjoys a dominant share of the UK market.

REVEALED: 200,000 POUND PAY RISE FOR CHIEF OF AILING BA PENSION FUND

Michelle McGregor Smith, chief executive of British Airways' (BAY.L) pension fund, received a pay rise of nearly 200,000 pounds last year to 514,254 pounds, more than the company's finance director. BA's pension fund deficit is one of the largest in Britain and has continued to grow over the past two years to an estimated 3 billion pounds. The revelation comes as the airline has called on its staff to work for nothing as part the company's "fight for survival".

The Sunday Telegraph

DIY CHAIN FACES TOUGH CREDIT REVIEW

Focus DIY's lenders have called in Ernst & Young to conduct a financial review in order to help them decide whether to continue backing Britain's third-largest DIY retailer. HBOS and GMAC have agreed in principle to renew the two-year credit facility but want to conduct an independent review. Focus's own auditor KPMG has conducted its own review and is thought to have raised the possibility of the company seeking a company voluntary agreement. Focus has faced increasing pressure after credit insurers reduced cover to its suppliers.

PAPA JOHN'S TO SPREAD ITS PIZZA BASE

Pizza chain Papa John's intends to increase its number of stores from 135 to 300 by 2013 in a move that will create hundreds of jobs. It has already opened 17 stores this year so far and plans a further 15 in the second half. One of Britain's biggest pizza chains, it will announce like-for-like sales for the second quarter were up 14 percent on 12 ago and is planning to open a dough manufacturing operation in Milton Keynes in the first quarter of next year to help fuel its growth plans.

QINETIQ IN PAY ACCORD WITH UNION

Defence research group Qinetiq (QQ.L) has agreed a framework of pay discussions with union Prospect in a move which has averted potential industrial action. UK workers threatened to strike after the company said it intended to freeze salaries, but discussions with unions are unlikely to result in significant pay increases. Prospect said the review must reflect the underlying business performance and budget forecasts but government cuts in defence spending will clearly influence any outcome.

The Independent on Sunday

CENTRICA CHIEF: HOSTILE BID WILL HOLD GAS PRICES