PRESS DIGEST - British business - June 18

The Times

L&G DEMANDS INVESTORS HAVE THE MUSCLE TO FORCE CHANGE

Legal & General (LGEN.L) has launched its biggest call yet for boardroom reform, calling for the chairman, senior independent director, and heads of committees at listed companies to face re-election each year, as part of a five point plan to overhaul company practices. The influential investor said that aggrieved investors should be able to join forces and lobby for change, and in time, every director should be approved by shareholders each year.

VODAFONE AND ORANGE AGREE MOBILE USE IN AIRCRAFT

Vodafone (VOD.L) and Orange have agreed to open their networks, by giving roaming permission to OnAir, which provides mobile services to carriers such as Ryanair (RYA.I). The operators had originally blocked the plan amid fear that customers would be caught out by high charges, but will now join operators O2 and T-Mobile in allowing customers to use the OnAir system. Onboard mobile services are still new and only a few aircraft in Europe have the technology, but numbers are likely to grow.

BAT HOPES TO STRIKE LUCKY IN INDONESIA AS IT PAYS 300 MILLION.

British American Tobacco BATS.L is to buy a controlling 85 per cent stake in Bentoel Internasional Investama for 494 million dollars. BAT said it would be seeking to take full control of Indonesia's fourth-biggest tobacco firm, giving the cigarette maker its first taste of kretek, a kind of cigarette made with tobacco and cloves. About a third of Indonesia's 248 million people smoke, making it the world's fifth biggest tobacco market by volume and among the ten most profitable.

TEMPUS

WS Atkins(ATKW.L) [Pass]

RPC [Hold on]

Alexon [Avoid]

The Daily Telegraph

FAVOURITE FOR ITV HOT SEAT ACCEPTS BOARD ROLE AT BT

Former BSkyB(BSY.L) CEO Tony Ball has accepted a place on the board of BT(BT.L) as a non-executive director. Ball is an executive at German pay-TV company Kabel Deutschland and is the preferred choice to fill Michael Grade's place as chief executive for many of ITV's(ITV.L) investors. This new appointment, however, does not rule Mr Ball out from the ITV job. BT has also announced the departure of BT Vision CEO Dan Marks, just weeks before an expected update from Ofcom on its review into the pay-TV market. Mr Ball's German interest has also given him experience in the expanding broadband market.

FIVE CHIEF ATTACKS DIGITAL BRITAIN REPORT FOR 'FUDGING' CHANNEL 4.

Dawn Airey, the chief executive of broadcaster Five, is dismayed at Lord Carter of Barnes' Digital Britain report which recommended a tie-up between Channel 4 and BBC Worldwide, discounting the merger with Five. In comments on the report, Airey called the suggestions "a political fudge" and said the financial backing that Five, which is owned by RTL(AUDKt.BR), would have brought to a tie-up with Channel 4 would have been "titanium plated" and produced annual synergies of 150 million pounds. Airey added that "the transparency, accountability, competition and state issues that it raises will be closely monitored by the industry."

CHINA: RIO-BHP TIE UP 'MONOPOLISTIC'

The proposed iron ore joint venture between miners Rio Tinto(RIO.L) and BHP Billiton(BLT.L) has "strong monopolistic flavour" according to Chinese state-owned media groups. The venture was announced after Rio walked away from a 19.5 billion dollar strategic investment by Chinalco in favour of a 12.5 billion dollar rights issue to reduce its debt. Chen Yanhai, an official at the Ministry of Industry and Information Technology said the joint venture was "likely to have a big impact on the Chinese steel industry as China is the worlds biggest iron ore importer."

QUESTOR

Lonrho [Buy]

Rolls-Royce(RR.L) [Buy]

The Independent

HOLIDAYBREAK'S 31 MILLION POUND CASH CALL TO BUY SCHOOLS

Holidaybreak hopes to turn a number of defunct private schools into holiday camps for children, by means of a 31 million pound rights issue. The education and travel group has announced plans to issue four new shares for every existing nine at 153 pence - a 49 percent discount at 16th June's closing price of 299.75 pence. The positive reaction of investors pushed up the company's shares by 6.8 percent to 320 pence. "A window of opportunity exists to acquire assets at relatively attractive prices, which in turn should cement Holidaybreak's leading market position", commented Nick Batram, an analyst at KBC Peel Hunt.

TRAVELODGE TARGETS STRUGGLING HOTELS

Travelodge has created a 100 million pound property fund in collaboration with Meghraj Properties, in the hope of taking advantage of distressed assets in the hotel sector. The fund intends to acquire between eight and 14 hotels, which will then be leased to Travelodge. The company stated that the owners of numerous mid-market hotels have contacted them since last summer looking to sell them their properties, but "excessive valuations placed on the properties" had previously been an obstacle to potential sales.

OCADO LOOKS TO FLOAT AT START OF NEXT YEAR

Ocado has announced that it may float on the stock market in 2010. The internet delivery company has declared that it is enthusiastic about the idea of a public listing during the early part of next year. An initial public offering would result in lucrative payouts for the three former Goldman Sachs employees who founded the company, with other major shareholders such as John Lewis Partnership's pension fund and Proctor & Gamble also profiting from the proposed move.

INVESTMENT COLUMN

WS Atkins (ATKW.L) (Hold)

RPC Group (Buy)

Imaginatik (Hold)

The Guardian

NATIONAL EXPRESS DOES DEAL TO EASE 1.2 BILLION POUND DEBTS

The public transport group National Express (NEX.L) has negotiated a restructuring of its 1.2 billion pounds of debt with its creditors, although it is still likely that the company will still require a 400 million pound rights issue. The problems of a prohibitively costly east coast franchise and a poorly performing Spanish coach business will probably make a cash call necessary. "The market would probably like to see a rights issue as part of an overall restructuring of the balance sheet", remarked Douglas McNeill of Astaire Securities.

SAINSBURY'S GOES TO WAR WITH LAND-GRAB MILLIONS

Sainsbury's (SBRY.L) has raised 432 million pounds, intended to buy up the properties of distressed sellers, following a trend of supermarkets aggressively pursuing more newly-cheap land to build on. The company hopes that their equity and bond issue could provide funds for up to 50 new stores and 50 extensions. This bullish move came as Sainsbury's reported a 7.8 percent like-for-like sales increase in the 12 weeks to 13th June, the best quarterly performance since the early 1990s.

WALSH BOOSTED AFTER BA PILOTS AGREE "GROUNDBREAKING" PAY-CUT.

The union representing pilots at the struggling airline BA (BAY.L) have struck a deal with the management on pay. In exchange for a long-term incentive scheme that will give pilots 13 million pounds' worth of company shares in 2014, BALPA has agreed to a cut in pay of 2.6 percent and an increase in non-flying hours. The deal has yet to be approved by a ballot of BALPA-affiliated pilots, but its backing from the union means that its chance of success is high. The news indicates that Willie Walsh's attempt to make employees take pay cuts to help the company through its crisis has begun to move forward.

Prepared for Reuters by Durrant