PRESS DIGEST - British business - June 14

The Sunday Times

LLOYDS TO TAKE 450 MILLION POUND HIT AS PUB VALUES FALL FLAT

Lloyds Banking Group (LLOY.L) will lose an estimated 450 million pounds on Admiral Taverns as a result of the steep fall in the estate value of the pubs group. Admiral had received a loan from the Bank of Scotland arm of Lloyds to the tune of 850 million pounds to finance a string of acquisitions. Admiral's estate is now thought to be worth less than 500 million pounds, and the bank is sounding out potential buyers.

G8 NOTE OF HOPE ON WORLD ECONOMY

At their meeting in Italy on Saturday, finance ministers from the G8 economies said there were "signs of stabilisation" in the global economy but that recovery prospects were uncertain. While so-called exit strategies from the unprecedented measures to prop-up banking systems and lift economies out of recession were discussed, no agreement was reached. Chancellor of the Exchequer Alistair Darling told the meeting the priority for coming months ought to be to ensure that any signs of recovery are nurtured. He reiterated his position that Britain's economy will begin to grow before the end of the year.

LOVEFILM OWNERS TO SELL OUT

The online DVD rental firm Lovefilm has hired the investment bank Jeffries to advise on a number of approaches it has received for the business and to work on a possible sale. With its 1.2 million members, Lovefilm has become the market leader in mail-order film rental, having bought out most of its rivals, including an agreement last year to acquire the European rentals operations of Amazon for 63 million pounds. Led by chief executive Simon Calver, Lovefilm's management owns a seven percent stake in the firm, with Amazon (AMZN.O) having a 32 percent shareholding, and the rest of the company being owned by venture capital firms and business angels.

The Sunday Telegraph

BP CLOSE TO ENDING LONG SEARCH FOR HEAVYWEIGHT CHAIRMAN

After what has at times been a torturous search for a new chairman, BP (BP.L) may be about to end it with an announcement made before the end of the month. It is understood directors of the oil giant have identified Paul Anderson, an American mining and energy executive, as a leading candidate to succeed Peter Sutherland, who has held the position since 1997. Institutional investors, who have urged BP to recruit a chairman with a detailed understanding of the challenges facing the company and the broader oil industry, are likely to be satisfied with the appointment of Anderson. He has a strong pedigree in the energy resources industry, having served as chief executive and managing director of the mining giant BHP Billiton, where he is currently a non-executive director.

INVESTORS TELL RBS: PAY THE CHIEF EXECUTIVE MORE

Sir Philip Hampton, chairman of the Royal Bank of Scotland (RBS.L), has had to overhaul a planned incentive package for the bank's chief executive, Stephen Hester, after institutional investors expressed concerns that the deal was not generous enough. Hampton is now in final discussions for clearances of the redesigned scheme with UK Financial Investments, the Treasury body that manages the state's 70 percent stake in RBS. The original incentive package would have been worth 6.23 million pounds to Hester and would have generated a 7.34 billion pound paper profit for the taxpayer on the state's 20 billion pound equity investment. Hester would have qualified for a full payout if certain total shareholder return targets were met and RBS shares recovered to 70 pence within three years. On Friday, the shares closed at 39.9 pence.

BT ATTACKS BROADBAND DEAL PLANS

BT (BT.L) has attacked government proposals to give mobile operators hundreds of millions of pounds worth of 3G licences in return for the provision of access to mobile broadband in rural areas. The move, expected to be an element in the government's Digital Britain report to be released this week, was described by BT as "anti-competitive" and an "uneconomical use of state assets". Communications Minister Lord Carter will announce plans on Tuesday for a "Universal Service Obligation" to make certain that by 2012 every household has access to 2 megabyte (Mbs) broadband, the speed fast enough to watch TV over the Internet.

The Observer

LACKLUSTRE GROWTH FOR TESCO AS RIVALS SURGE AHEAD