PRESS DIGEST - British business - April 2

The Times

VIRGIN AND DIC HOLD TALKS ON FUNDING BRANSON'S PLANS FOR EXPANSION

Virgin has held preliminary informal talks with a view to securing investment backing from Dubai International Capital, the $12 billion (6 billion pound) sovereign wealth fund. It is understood that Virgin executives recently visited Dubai to meet representatives of DIC to discuss potential deals. Goldman Sachs has been retained by the Virgin Group to explore revenue-raising options to finance an expansion of Virgin Active, which has already opened two gyms in Dubai, is planning several more, and is considering a move into countries such as Italy, Portugal and South Africa.

ALBA LOOKS AT HIGH MARGINS TO HALT LOSSES

Alba said on Tuesday that losses for the past year would far exceed expectations, blaming fierce competition on the high street. The consumer electronics distributor of brands such as Goodmans, Grundig and Bush said that tumbling prices meant that it was impossible to make money supplying entry-level flatscreen televisions to leading retailers, as it announced that trading losses for the year to March 31 were expected to be 10 million pounds. Investec, the house broker, forecast 6.7 million pounds. "We have been in a difficult trading environment for a couple of years, it has become more difficult and we are restructuring accordingly," said Andrew Rose, Alba finance director.

HANSON WALKS AWAY AS MOSS BROS FAMILIES 'HOLD OUT FOR HIGHER OFFER'

The increasingly protracted takeover saga of Moss Bros took its latest twist on Tuesday as it emerged that John Hanson, the rebel shareholder, has scrapped plans to table a bid for the menswear retailer. Hanson, who heads rival chain Greenwoods, said that he was conceding defeat after weeks of trying to court the Moss and Gee families. "We are withdrawing," he said, adding that the families - who together control about 26 percent of the company's shares - were "holding out for a higher offer" than the indicative 40 million pound approach made in February by Baugur, the Icelandic investment group. Speculation is rife that Laura Ashley could make a bid, with the home furnishing chain having built up a 5.96 percent stake through a series of recent purchases.

The Daily Telegraph

FORMER M&S CHIEF HAILS ROSE PROMOTION

Former Marks & Spencer (MKS.L) chairman Paul Myners has leapt to the defence of current chief executive Sir Stuart Rose, the subject of shareholder disquiet pertaining to his promotion to executive chairman. Myners underscored the importance of Rose remaining at the retailer for longer than had been expected, explaining: "We must ensure we see the wood for the trees. The good news for M&S shareholders is that Stuart is committing for a further three years." Institutional shareholders remain vehemently opposed to Rose's elevation, Schroders head of UK equities, Richard Buxton, saying: "Rose is sufficiently arrogant to say that if you don't want me to take this role I will leave. The company is bigger than an individual."

CONSORTIUM TARGETS WH IRELAND

Former Conservative Party treasurer Lord Marland heads a consortium that has struck a deal to acquire 26 percent of WH Ireland and take two seats on its board, paying 1.7 million pounds on an initial 9.94 percent stake. Subject to approval from the Financial Services Authority by June 30, the consortium plans to lift its stake to at least 26.05 percent. Marland said of WH Ireland: "This is a British company that has done very well and we think it has a very good platform in the current climate."

GSK DEFENDS SAFETY RECORD OF HIV DRUG

A report indicating that GlaxoSmithKline's (GSK.L) abacavir HIV drug could increase heart attack risk has been met with defiance by the drugs group. Indeed, the latter said that the study, by the Data Collection on Adverse Events of Anti-HIV Drugs, was "unexpected, since we have not seen similar findings in our studies, and we are unaware of any potential biological mechanism that would explain them." The US drug regulator FDA said that while the D:A:D findings were incomplete, GSK's analysis of abacavir's safety was inconclusive.

The Independent

METRONET NEARER EXIT FROM ADMINISTRATION

Metronet has taken a step closer to escaping from administration as it announced the cancellation of a 550 million pound contract to upgrade the signalling systems on nearly a third of the London Underground, a decision that would result in "significant savings" and allow it to keep completion of the multi-billion pound project on track. Once Metronet emerges from administration the contract will be re-tendered, with the process overseen directly by the company. The deal was "a real step forward in the process of removing Metronet from administration", said Tim O'Toole, managing director of London Underground.

PHOTO-ME'S EX-CHIEF OUSTS GROUP'S CHAIRMAN

Photo-Me's difficulties continued on Tuesday with David Young, interim chairman of the beleaguered digital imaging chain, forced out of his position by Serge Crasnianski, a major shareholder who was himself ousted from the chief executive's job in November. The company announced that Young had stepped down, along with two other non-executive directors, to be replaced in the interim by Conservative MP and non-executive director Hugo Swire, pending the appointment of a permanent Chairman. The shares closed slightly up, but still at a woeful 15.5 pence, having sold for 90.5 pence in January last year.

OFT MAY MAKE GLOBAL SELL SOME GCAP STATIONS AFTER TAKEOVER

Competition rulings may force Global Radio to offload some radio stations in the Midlands if its 375 million pound takeover of GCap is to succeed. Following GCap's acceptance of Global's 225 pence-a-share offer, the Office of Fair Trading started looking at areas of crossover between the two companies. While there is overlap in London between the firms' Heart, Choice, Xfm and Capital stations, any OFT ruling is likely to focus on Leicester Sound and Trent FM. "Most advertising on London stations is booked by agencies, so it is deemed to be national rather than local, and is therefore considered to have more available options", explained Richard Menzies-Gow at Dresdner Kleinwort.

The Guardian

POSTAL WORKERS REJECT ROYAL MAIL PENSION REFORMS

Royal Mail workers have rejected the group's plans to reform its pension fund, and may as a consequence effect strike action. The group last year suffered a series of strikes over pay, modernisation proposals and pensions, and claims that pensions reforms were part of its settlement with employees. The Communication Workers Union said that with 92 percent of the vote against the postal business' proposals, "the result of this ballot clearly demonstrates that Royal Mail's pension consultation was a sham."

PLANT SALE PROVES FRUITFUL FOR NATIONAL GRID

National Grid (NG.L) on Tuesday sold its Ravenswood power plant, New York, to TransCanada Group, UBS analysts saying that the former "received a price of $1,160 per kilowatt, which is a good price - a slight premium to re-investment cost." National Grid chief executive Steve Holliday expressed satisfaction at the outcome of the sale process - a condition of the firm's acquisition of Keyspan, for almost seven billion pounds - saying: "Not only have we quickly delivered on our obligations to the New York Public Service Commission to sell Ravenswood but we have also delivered value to our shareholders."

TOYS AND BEDS FIRMS CALL IN ADMINISTRATORS

Bed retailer Sleep Depot and toy store chain Toyzone have both entered administration. Directors of the former called in administrators from Kroll following its failure to refinance debt, while KPMG has been put in charge of the affairs of Youngsters, which parents 20 Toyzone stores. Kroll's James Gleave said that the firm has, in the wake of evaluation, "regrettably concluded that it is impossible for The Sleep Depot to continue to trade." KPMG restructuring partner, David Crawshaw, commented: "We are now reviewing options for both parts of the group and hope to secure a buyer for its business and assets."

Prepared for Reuters by Durrants