PRESS DIGEST - Financial Times - June 20

Financial Times

STRIKES JEOPARDISE BIG PROJECTS, WARNS IOD

Business leaders have warned that projects such as the building of new power stations and London's Crossrail scheme could be jeopardised if the engineering construction industry does not improve its industrial relations. Sympathy stoppages, with workers striking in support of workmates, were held by 2,500 staff at eight sites yesterday. Alistair Tebbit, head of EU employment affairs at the Institute of Directors, said: "With a host of vital infrastructure projects underway or in the pipeline, it is deeply worrying that we are seeing more and more illegal strike action taking place in the construction sector."

LANDLORDS TO SEE FURTHER FALL IN RENTAL VALUES

A Royal Institution of Chartered Surveyors survey out next week will show that the net balance of chartered surveyors reporting falls rather than rises in rents was up from 48 per cent to 55 per cent in the three months to April - the highest figure in the ten-year history of the survey. 85 per cent of London surveyors reported a fall in rents, up from 71 per cent three months previously, while 80 per cent of surveyors in Scotland also reported declines.

LEGAL EXPERTS WARN ON PIRACY FIGHT

Legal experts and industry analysts have warned that measures to counter online piracy could be circumvented as soon as they are introduced. The government outlined targets to reduce online piracy by 70 per cent in its Digital Britain white paper released last week. Included in the plans are requirements for Internet Service Providers to write warning letters to customers spotted illegally downloading copywrited material, while persistent offenders will be pursued in the courts.

VIRGIN AND GO-AHEAD RILED BY RAIL OWNERS

Tony Collins, chief executive of Virgin Trains, and Keith Ludemann, chief executive of Go-Ahead Group (GOG.L), the majority owner of the London Midland commuter rail franchise, have both accused Network Rail of failing to properly manage the west coast main line, with infrastructure failures leading to a collapse in punctuality on the newly-upgraded route. Robin Gisby, director of operations and customer services at Network Rail, accepted responsibility, saying: "We have to fix it."

DAIRY CREST HOLDS TALKS ON PENSIONS

Talks between dairy foods company Dairy Crest (DCG.L) and the 3,300 employees in its defined benefit pension scheme could see the scheme closed to current workers. Group finance director Alistair Murray said that other options included reducing the rate at which pension entitlements are accrued or basing pensions on average career earnings rather than final salaries. The company also announced that it has reduced the risk in the scheme by buying a second bulk annuity from Legal & General Assurance (LGEN.L).

CANDOVER WINS BREATHING SPACE WITH 553 MILLION POUND.

Troubled private equity group Candover (CDI.L) has agreed to sell energy research and consultancy group Wood Mackenzie to rival Charterhouse Capital Partners. The 553 million pound deal is the largest private equity deal seen in the UK this year. However, analysts are still uncertain about Candover's future, citing its new three billion euro fund - which has been in limbo since Candover decided it could no longer honour its own one billion euro commitment - as cause for concern.

TAYLOR WIMPEY SEE SIGNS OF RECOVERY

Taylor Wimpey (TW.L) has announced that orders for its homes in the UK have risen 73 per cent since the start of the year and indicated that the housebuilder may break even during the second half of the year. The company's UK order book has increased to 971 million pounds, from 562 million pounds at the start of the year. The Group also said that it has already sold 80 per cent of the 10,000 - 11,000 properties that it expected to sell in the UK this year.

SEGRO FINALISES LOWER TAKEOVER BID FOR BRIXTON

The industrial property group Segro (SGRO.L) could conclude a takeover agreement for its rival Brixton BXTN.L as early as next week, although an official announcement is not expected until full due diligence of the company has been completed. Segro is said to be considering whether to launch a rights issue to fund the acquisition or whether to use an all-share offer utilising the company's existing balance sheet. Brixton shares closed at 62.5 pence yesterday, valuing the company at around 170 million pounds, Segro's proposed offer is expected to be much less than this.

RIO SHARES FALL AS CHINALCO PLAYS CARDS CLOSE TO ITS CHEST

Rio Tinto's (RIO.L) UK shares fell almost 20 per cent over the course of last week, due partly to the uncertainty over whether its largest shareholder Chinalco would take up it rights in the mining company's 9.2 billion pound rights issue. Chinalco, the Chinese state-operated aluminium producer, has yet to confirm whether it intends to execute such a move. Rio said: "We are comfortable with the current situation, which is broadly in line with previous rights issues including those of Xstrata (XTA.L) and HSBC HSBC.L."

M&B BOLSTERED AS JOE LEWIS INCREASES STAKE

On Friday, the Bahamas-based millionaire Joe Lewis increased his shareholding in the pubs group Mitchells & Butlers (MAB.L) via his piedmont investment vehicle from 21.8 per cent to 22.3 per cent. News of Lewis' increased investment, coupled with rumours that an unnamed East Asian bank is looking to buy 5 million shares, saw M&B's shares rise 11.7 per cent on Friday - the company's largest gain in over a month.

Prepared for Reuters by Durrants