Newspaper round-up

LONDON (Reuters) - Here are the business headlines from Thursday's British business press.

Financial Times

FRESH WARNING ON BANKS' CAPITAL

Charlie Bean, deputy governor of the Bank of England, said the government may have to loan banks billions more pounds, two months after an unprecedented 37 billion pound recapitalisation package to stimulate the economy. Mr. Bean said banks are still finding it progressively harder to lend and implied interest rates may fall even lower as the economic outlook continues to deteriorate. He encouraged the Financial Services Authority to consider reducing the banks' minimum capital requirements.

C4 PITCHES 500 MILLION POUND RESCUE BID.

Negotiations are taking place between Channel 4 and BBC Worldwide over a deal that would see parts of BBC Worldwide split off and conjoined with the ailing broadcaster as a new company, with Channel 4 investing 500 million pounds of capital. Such a deal would solve the financial crisis facing Channel 4, but problems could arise over the control of the new entity. "Channel 4 has high expectations of controlling any combination with Worldwide. I think it is at least as likely to be the other way round", remarked a person familiar with the matter.

GRIM JOBS OUTLOOK AFTER DOLE CLAIMANTS TOP ONE MILLION

Office of National Statistics data indicates unemployment rose by 75,700 to 1.07 million in November, the highest figure for eight years. Joblessness is expected to rise at an even faster rate in January and February 2009, as many employers are believed to be waiting until after Christmas before announcing redundancies. The number of young people aged 18-24 out of work rose 55,000 during the three months to October to 597,000, the worst level since 1995. "We are looking at a forecast (for total unemployment) of three million in 2010, or higher", said the UBS(UBSN.VX) economist Amit Kara.

MPC MULLED AN EVEN BIGGER REDUCTION

Economists are predicting a further cut in interest rates in January after the minutes of the Bank of England's monetary policy committee's last meeting revealed an even sharper cut in interest rates was proposed than the one percent reduction which took place. A unanimous vote from the MPC cut the rate to two percent, the lowest level since 1951; a stronger cut was considered but ultimately ruled out, due to the fears of committee members that a more aggressive move would undermine the pound. "With headline inflation set to plummet, further aggressive cuts should materialise in the New Year", commented Colin Ellis, economist at Daiwa Securities.

WOOLWORTHS' STORES GIVEN FINAL DATE FOR CLOSURE

Administrator Deloitte has failed to find a buyer for Woolworths WLW.L, and all 807 of the retailer's stores will close by January 5, with the likely loss of 27,000 jobs. Though Woolworths will not be sold as a going concern, other retailers are expected to buy the leases on around 300 of the stores. Current strong trading at the stores should allow creditors to claim back most of the company's debt. Deloitte says talks with potential acquirers could yet see the Woolworths brand return to the high street.

ARSENAL'S FUTURE IN CHAOS AFTER BOARDROOM ROW

The board of Arsenal has ousted Lady Nina Bracewell-Smith following reported heated exchanges at a board meeting last Thursday. A statement released by Arsenal said Bracewell-Smith would leave the boards of the company and club with immediate effect. There had been concerns on the board the Bracewell-Smith was looking to sell her stake, and her departure effectively renders void a lockdown agreement under which directors had agreed to sell shares only to each other. Red and White Holdings, the Arsenal investment company of Russian steel magnate Alisher Usmanov and his partner Farhad Moshiri, said: "We are watching developments with interest."

MONEYSUPERMARKET FOUNDER STEPS ASIDE AS PROFIT FALL LIKELY

Simon Nixon, founder and chief executive of the Moneysupermarket(MONY.L) website, is to step down to the position of executive deputy chairman. The announcement comes as the website announces it expects earnings to fall again next year, and will see Nixon spending one day per week with the company while pursuing other start-up opportunities. Peter Plumb, who formally joined Moneysupermarket's financial services business last month, will take up the position of chief executive. Shares were up 2.75 pence at 49 pence.

F&C CUTS JOBS TO PREPARE FOR TOUGHEST YEAR

F&C Asset Management (FCAM.L) are in the process of consulting staff on between 60 and 90 job cuts in an effort to reduce annual operating costs by a further 12 million pounds. F&C chief executive, Alain Grisay, said the company was braced for one of the toughest years the industry has yet faced: "Over the past quarter we have seen the market in free fall, and the concern is that 2009 will be a year of recession with savings falling and lower inflows. Ahead of that we are adjusting our cost base down," he said. Grisay confirmed that most of the job losses would be support staff rather than fund managers.

DAIRY CREST ACTS TO LOWER FINANCIAL RISKS

Food manufacturer, Dairy Crest (DCG.L) has moved to exchange some of its euro-denominated debt into sterling amid fears a further fall in the value of sterling could cause the group to breech its banking covenants. Dairy Crest has announced it has exchanged 200 million euros of debt into sterling and through the company's pension scheme it is to buy a 150 million pound bulk annuity policy, resulting in the company having euro denominated debts of 170 million euros -- a proportion that more closely matches its business, which generates a quarter of its income in France and the Republic of Ireland.

ASHLEY SET TO HANG ONTO NEWCASTLE

Sportswear entrepreneur Mike Ashley expects to continue his ownership of Newcastle United Football Club beyond the end of this season because he cannot find a buyer willing to meet his 250 million pound asking price for the club. The Sports Direct (SPD.L) founder said on Wednesday he expected the company to prosper from the recent troubles experienced by rival JJB. Sports Direct announced a three per cent rise in underlying profit to 51.8 million pounds for the 26 weeks to October 26, raising the group's share price by eight per cent. Total revenues also rose three per cent to 687.7 million pounds.

The Times

SHAKE-UP AT SCHRODERS AS FINANCE DIRECTOR QUITS

Philip Mallinckrodt, the nephew of billionaire Bruno Schroder, was promoted to the main board of the Schroders(SDR.L) fund management group on Wednesday. Mr Mallinckrodt was appointed in recognition of his success in transforming the group's private banking division. He is also tipped as the likely successor to Michael Dobson, the chief executive who has run the group since 2001. Schroders also revealed that neither it nor its clients had any direct exposure to the Madoff investment scandal.

BANK FEARS HIT PREMIUM BARS

Premium Bars and Restaurants saw its shares lose a third of their value on Wednesday following an admission that it had failed to renew its banking covenants. Instead, the group's banks want it to raise additional funds to meet its short-term cash requirements. The company is negotiating with its key stakeholders to secure sufficient funding, and is said to be confident of securing the money soon. The company cautioned, however, that it could not be certain of continued support from its banks. Its shares fell 1.375 pence to reach 3.125 pence.

OPTIMISM BUILDS IN TAYLOR WIMPEY AFTER E-MAIL LEAK

On Wednesday, Taylor Wimpey's(TW.L) shares soared more than seven per cent as dealers speculated the housebuilder might resolve its financing issues within coming weeks. The speculation arose following a leaked e-mail from chief executive Pete Redfern, which told staff the company has had "very productive negotiations" with its banks about its debt over a two-week period. The news increased the confidence that it was close to reaching an acceptable solution for the company.

The Daily Telegraph

DAIRY CREST IN MOVE TO EASE DEBT WORRIES

Dairy Crest(DCG.L), the maker of Cathedral City cheese, has made moves to decrease risk in its 658 million pound pension scheme, and lower currency exposure in its debt pile. However, analysts have warned that the group could still face banking covenant issues in 2009. Last month, Dairy Crest warned that profits would fall ten per cent this year. The company has bought a 150 million pound bulk annuity policy from Legal & General(LGEN.L) to insure part of its pension liabilities.

F&C CUTS 60 JOBS TO REDUCE COSTS

F&C Asset Management(FCAM.L) has announced it will cut roughly 60 jobs as part of its drive to reduce costs by 15 million pounds this year. The group has admitted to "downward pressure on revenues and asset margins". It has 900 employees, and the measures will mainly impact those in back-office functions. Friends ProvidentFP.L, which owns 52 per cent of the asset manager, signalled last month it was abandoning its attempts to sell its stake in F&C.

HUNTER SET TO PRUNE WYEVALE STAKE IN DEBT-FOR-EQUITY SWAP

Sir Tom Hunter, the Scottish entrepreneur, is likely to lose a major part of his stake in garden centre group Wyevale in a debt-for-equity swap with his bank HBOSHBOS.L, which is the group's only lender. HBOS is set to write off the 370 million pounds owed by the group, and the move is likely to leave the bank as its largest single investor. A spokesman for Sir Tom said: "The negotiations are ongoing and positive but they have not yet concluded. We are confident we will retain a major shareholding in that business which will be well financed going forward."

The Independent

PERMIRA INVESTORS REDEEM PLEDGED CASH

Permira, the buyout shop based in London that has offered investors some of their cash pledges to its last fund, revealed 13 per cent of the 10.3 billion pound fund had been called back. After ten per cent of investors took up the offer, the fund is now worth 9.6 billion euros. The buyout firm announced this month it would allow backers to redeem as much as 40 per cent of their commitment. Those redeeming will still pay full management fees based on their original contributions, and will also forgo 25 per cent of returns.

BOWE TO REPLACE LORD CURRIE AS OFCOM CHAIR

Colette Bowe, the Ofcom board member, is set to become the regulator's chairman when Lord Currie steps down at Easter. Ms Bowie will serve a five-year term with an annual salary of 200,000 pounds. She is chairman of council at Queen Mary College and on the boards of Morgan Stanley, Axa Framlington(AXAF.PA) and Electra Private Equity(ELTA.L). Business Secretary Lord Mandleson said: "Colette's knowledge and experience will be invaluable at Ofcom in helping deliver greater choice and innovation."

MORE DISCOUNTS AT M&S AS FEARS GROW OVER PROFITS

On Thursday, Marks & Spencer(MKS.L) is set to launch a new wave of pre-Christmas promotion offers as it battles what is understood to be calamitous recent trading, and concerns about its full-year profits. The retailer will slash prices by 30 per cent on men's and women's knitwear, its Autograph and Ceriso lingerie and its sleepwear range. According to trade magazine Retail Week, sales of core categories at M&S dropped by between 20 and 30 per cent last week.

The Guardian

BA CUTS FUEL SURCHARGES FOR LONG-HAUL PASSENGERS

British Airways(BAY.L) has cut its fuel surcharges by up to a third as it reels from falling oil prices and dwindling demand for air travel. The levy was introduced four years ago when fuel prices were high, but BA came under pressure to lower them recently. The airline said economy-class passengers on return flights to destinations more than nine hours away, such as Tokyo, would see their charge reduced from 192 pounds to 132 pounds. The price for long-haul flights less than nine hours away will drop from 136 pounds to 106 pounds. Virgin Atlantic also lowered its surcharges by similar rates.

BAA WARNED IT MAY BE FORCED TO ACCELERATE SALE OF STANSTED

BAA could be forced to accelerate the sale of Stansted airport amid concerns that the airports operator might slow down the development of a second runway. The Competition Commission revealed on Wednesday that the regulator could impose an early deadline on selling the airport because a planning inquiry on a second runway at the airport is due to begin next year. The chairman of the commission's investigation into BAA, Christopher Clarke, said: "BAA's one incentive for securing the planning permission is to get a higher price. All the other incentives point in the opposite direction."

SKY STRUGGLES WITH A SCEPTICAL AUDIENCE

BSkyB(BSY.L) saw its shares fall 10.75 pence to 472 pence on Wednesday, following concerns about how much the satellite broadcaster will have to spend to maintain its market share in an increasingly competitive TV market. HSBC(HSBA.L) analysts slashed their target price from 540 pence to 425 pence, and placed an underweight rating on the business. HSBC said: "BSkyB is responding to the changing industry structure, but its capital-light business model requires incremental costs to defend its traditional pay-TV business."

Share Tips

THE TIMES

Tempus:

Moneysupermarket.com(MONY.L) (avoid for now)

IPF (too soon to repeat buy on weakness call)

James Fisher (hold)

Rumour of the day: Blue Oar (speculation it will publish defence document against "little intrusion")

THE DAILY TELEGRAPH

Questor:

Primary Health Properties (buy)

Helphire Group(HHR.L) (avoid)

THE INDEPENDENT

Investment Column:

Wood Group (cautious hold)

Serco Group(SRP.L) (avoid)

Advanced Medical Solutions (buy)

Prepared for Reuters by Durrants