Business Digest

The Times

ROSE TO SELL KARAOKE STAKE AT CENTRE OF M&S ROW

Marks & Spencer(MKS.L) chief executive Sir Stuart Rose is to sell his 100,000 pound stake in Martha Lane Fox's karaoke business to dispel concerns over whether Ms Lane Fox's integrity as an independent director at M&S may be compromised by the holding. Although there was no suggestion of any impropriety, the move was welcomed by the Association of British Insurers, which had raised concerns.

C&R SHARES PLUNGE ON FEAR ITS MALL FUND HAS BREACHED COVENANTS

Capital & Regional(CAL.L) was on Thursday hit by a brutal share sell-off over concerns that its banking covenants had been breached by its flagship Mall Fund, resulting in a fifteen percent drop in its share price. The company said that the loan-to-value borrowing covenant with Royal Bank of Scotland (RBS.L) for the Mall Fund, in which it has a 24.2 percent stake, stood at 58.5 percent, rather than the 60 percent at which it is supposed to stay.

COWDERY BREATHES LIFE INTO RESOLUTION

Clive Cowdery has relaunched Resolution(RSL.L), his pioneering investment vehicle, to target distressed European financial services companies hit by the credit crunch. Aiming to work with existing management, who will be offered the opportunity to take part in any restructuring plans, Resolution will buy stakes in public companies as well as embarking on acquisitions.

The Daily Telegraph

LAND OF LEATHER SEES SALES PLUNGE AS SHOPPERS CUT BACK

Land of Leather on Thursday warned that a lack of money among its customer base was translating into falling sales figures, and said it would cut back on advertising and discretionary spending. The company, which was forced to issue a profits warning just before Christmas, said it expected further pressures during the rest of the financial year, but that efforts to cut costs by 11 million pounds on an annual basis were now under way.

HOWDENS JOINERY POSTS RISE IN SALES

Galiform (GFRM.L) published a 5.9 percent rise in like-for-like sales at its depots over the 16 weeks to April 19, with chief executive Matthew Ingle calling this a good performance in an economic environment which was "less certain". Despite his optimism, analysts' reactions were mixed, with Panmure Gordon reiterating its sell recommendation due to a predicted weaker trading outlook through the year, while Dresdner Kleinwort argued that the company was undervalued.

NORTHERN ROCK STARTS TALKS WITH UNIONS OVER PLANS TO CUT 2,000 JOBS

Northern RockNRK.L has begun consulting with staff and unions over plans to cut a third of its workforce, a procedure which it hopes to have concluded by 2011, with the majority of job losses taking place this year. Unite has urged to bank to avoid compulsory redundancies, as the situation the bank found itself in was not of their making. Under public ownership, the bank hopes to cut its mortgage book by 50 percent, pay off the Bank of England loans and release the government from its guarantees within three to four years.

The Independent

HSBC CALLS IN POLICE OVER ALLEGED 70 MILLION POUND FRAUD ATTEMPT

Police are investigating an alleged scam that was discovered last week at HSBC's(HSBA.L) securities services division, which settles trades for clients. One man was charged on April 25 with conspiracy to defraud, money laundering and abusing a position of trust after a payment to a bank raised suspicions at Britain's largest bank. HSBC said that no customer funds were involved, no transactions were disrupted and that it is "co-operating fully with a police investigation into an alleged fraud at the bank."

LLOYDS TO RESIST RIGHTS ISSUE DESPITE EFFECT OF WRITEDOWNS

Lloyds TSB (LLOY.L) is expected to announce next Tuesday that its strong capital ratios and access to funding will allow it to resist the need for a rights issue. HBOS HBOS.L and Royal Bank of Scotland (RBS.L) recently announced rights issues of four billion pounds and 12 billion pounds respectively, but a Lloyds spokeswoman said: "We continue to have a strong capital and funding position." Shares in Lloyds fell for the third day running, and closed trading on Thursday at 430.75 pence.

ABBEY CUTS RATES IN RESPONSE TO BANK OF ENGLAND INITIATIVE

Abbey, owned by Santander (SAN.MC) of Spain, has announced that it will cut the cost of its two-year fixed-rate mortgage deals by 0.11 percentage points, while its variable-rate and tracker mortgages will fall by 0.1 percentage points. The move follows last week's 50 billion pound Bank of England liquidity initiative, and an Abbey spokesman said: "We will continue to offer competitive products whilst still being careful to balance this against the need to maintain service levels for customers given recent competitor moves."

The Guardian

BARCLAYS COULD AVOID CASH CALL TO BOOST CAPITAL, SAY ANALYSTS

Analysts Keefe, Bruyette & Woods believe that Barclays (BARC.L), which is under pressure to bolster its balance sheet with a cash call of more than four billion pounds, may be able to raise money from other sources. One and a half billion pounds could be raised through a private placement without seeking approval from existing shareholders and the entire 2008 dividend could be paid in shares rather than cash, saving 2.3 billion pounds. Another option to save cash would be to simply cut its dividend.

CHIP DESIGNER LOSES 18 PERCENT OF ITS VALUE WITH 26 MILLION POUND WRITE-OFF

CSR (CSR.L) recorded a first quarter loss of 41.9 million dollars (21 million pounds) on sales up less than one percent at 160.9 million dollars, after demand for its chips from major electronics companies fell. Shares in the company, which were changing hands for over 900 pence last July, closed at 324 pence on Thursday. Analysts believe that the share price plunge makes CSR an obvious bid target.

TRAIN AND BUS CARRY BAD NEWS FOR BUDGET AIRLINES

National Express(NEX.L) has announced a "softening demand" on the Stansted Express train service and "lower footfall" on coach services. Ryainar RYA.I and easyJet EZJ.L, both of whom fly to Stansted Airport, recently issued profit warnings but they have yet to indicate that economic conditions have caused a fall in passenger numbers or forced them to cut ticket prices to uneconomic levels.

Prepared for Reuters by Durrants