PRESS DIGEST - British business - Oct 29

The Times

SLAUGHTER MAY LOSE ITS LEGAL STRANGLEHOLD ON BANKING

The Treasury is asking other law firms to tender for the role of the government's legal adviser on the banking crisis, threatening the position of the current occupier of the post, Slaughter and May. The law firm has been involved in the bailouts since the collapse of Northern Rock in 2007 and has generated 25 million pounds in fees. At this stage it is unknown which firms have tendered bids, but Slaughter and May is almost certain to keep some work, while its "magic circle" rivals, including Allen & Overy and Linklaters, are likely contenders.

BLACKS LEISURE SEEKS PACT TO LEAVE SHOPS AS DEADLINE LOOMS FOR FINDING RESCUE PLAN

Blacks Leisure's (BSLA.L) attempts to restructure its store portfolio have been met with opposition from landlords. Its lender, Lloyds Banking Group (LLOY.L), wants the company to offload 89 closed stores through a company voluntary arrangement. However, the retailer has not found a compromise that is acceptable to landlords. Blacks has until the end of November to jettison the loss-making stores, but must convince Lloyds that is has produced a viable turnaround plan by Friday. Martyn Chase, DTZ's retail head, said CVAs were "an absolute disaster for the industry. It's a blatant abuse."

YELL'S RESCUE BID IN PERIL AS LENDERS FAIL TO BACK SCHEME

Yell (YELL.L), the owner of Yellow Pages, has failed to convince its 300-plus lenders to approve its restructuring proposals and will now go ahead with a court application to impose the plan on the lenders. It is believed that just under 90 percent of the lenders by value agreed to the deal, five percent short of the required number. The deadline for the deal had been extended by three days, but yesterday's outcome means the courts could take up to eight weeks to approve a scheme of arrangement and leave Yell's share price in limbo until the new year.

The Daily Telegraph

LLOYDS TO QUIZ INVESTORS OVER 25 BILLION POUND CASH CALL

Lloyds Banking Group (LLOY.L) will ask its investors on Thursday whether it should raise 25 billion pounds of capital in a bid to leave the government's insurance scheme for its toxic debts. The bank will meet government officials and shareholders on Thursday morning to discuss commitment to a planned 11 billion pound rights issue in the light of its falling share price. The government fears questions over economic stability if the rights issue fails.

GSK SALES BOOSTED BY SWINE FLU

GlaxoSmithKline (GSK.L) has boosted its revenues through swine flu, toothpaste and its performance in emerging markets. On Wednesday, it announced third-quarter revenues of 6.76 billion pounds, up three percent in constant currency terms -- the first increase of that kind for over two years. Analysts are predicting sales of the swine flu vaccine Pandemrix will generate one billion pounds in revenue for GSK in the fourth quarter. Sales of its anti-viral treatment Relenza have already soared. Chief executive Andrew Witty said the results proved his diversification of GSK's investment strategy had worked.

CARPETRIGHT POINTS TO HAPPIER OUTLOOK

On Wednesday, Carpetright (CATVU.L) reported its strongest quarterly increase in sales since August 2002, a sign that the consumer economy is recovering. Lord Harris of Peckham, its founder, revealed an increase of 5.6 percent in the three months to October 24. Despite analysts' scepticism over the results -- which follow a double-digit decline last year -- Harris remained optimistic about the economy. He praised Carpetright's "solid start", before backing the Conservative Party to win next year's election. Carpetright's share price fell 14 pence to 886 pence.

The Independent

BAA LOSSES BALLOON ON LOW PRICE FOR GATWICK