PRESS DIGEST - British business - April 13

The Sunday Times

M&B TASTE FOR SPIRIT

Mitchells & Butlers (MAB.L) has held talks to buy part of Punch Taverns' (PUB.L) estate. The pubs group wants to buy Spirit, and the two sides met last week. M&B will raise funds to buy Spirit by selling a minority stake in itself to a private-equity firm. It has already received proposals from three groups -- Bain Capital, Permira and a combination of CVC and Blackstone.

SCOTTISH RETAILER OSSIAN SINKS UNDER 25 MILLION POUND DEBT

Ossian Retail Group is poised to go into administration this week, and the move is likely to result in the company being broken up, with its brands and 120 stores sold to various buyers. A distressed-debt investment specialist, Agilo, has initiated the move, and had previously bought up Ossian's entire 25 million pound debt last week. Agilo is understood to be confident of keeping most of the company's 2,500 jobs, despite taking such a dramatic step.

BT'S NEW CHIEF THROWS DOWN GAUNTLET TO OFCOM

Ian Livingston is challenging Ofcom to make sweeping changes to BT's (BT.L) universal service obligation (USO) before he will commit to investing billions of pounds in a new fibre-optic network. Livingston said: "We will not spend material amounts of money that will guarantee that we will lose money for shareholders."

The Sunday Telegraph

BA INVESTOR CALLS BROUGHTON TO TALKS ON HEATHROW CRISIS

Standard Life Investments has demanded an urgent meeting with British Airways' (BAY.L) chairman, Martin Broughton, over the calamitous opening of Heathrow's Terminal 5. Broughton will meet SLI's head of UK equities, David Cummings, and the fund manager's head of corporate governance, Guy Jubb, on Monday to try to persuade them that he is still in control of the board. The fund managers are due to meet the airline's chief executive, Willie Walsh, on Tuesday to express their concerns.

PETCHY BUILDS SECRET STAKE IN PENDRAGON

Jack Petchey has amassed a secret stake in the UK's largest car dealership, Pendragon (PDG.L). Petchey is understood to have acquired a 13 percent stake in Pendragon using controversial derivatives known as contracts for differences (CFDs). The revelation will spark speculation Petchey plans to pressurise the Pendragon board to realise value from its freehold property portfolio or consider a merger with another major player in the sector.

BINGO OPERATOR GAMBLES ON CASH INJECTION

Hermes Private Equity has been forced to inject millions of pounds into one of Britain's largest operators of bingo clubs, Mayfair Gaming, underlining the "perfect storm" facing companies across the troubled industry. Hermes has spent over 10 million pounds to try to shore up its investment in Mayfair. The move comes as Alchemy Partners prepares to hand control of its Buckingham Bingo group back to Barclays.

The Observer

TESCO SAYS U.S. STORES ARE NOT A FAILURE