PRESS DIGEST - British business - June 3
The Times
PRIMARK PLANS TO TAKE ITS CHEAP CHIC CONTINENTAL
Primark conquered the British high street with its cheap chic, and it is now preparing an assault on Europe with plans to open its first stores in Germany, Portugal and the Netherlands next year. In comments that mark the first time that Associated British Foods (ABF.L) has detailed the next phase of Primark's strategy, John Bason, its finance director, said: "We now feel that we can develop on all fronts."
BAA SECURES FUNDING THAT WILL LET IT REVAMP AIRPORTS
BAA has secured a 7.65 billion pound financing package from its banks in a move that will enable it to redevelop large parts of Heathrow and Stansted. The move comes after a year of delays to the refinancing, which has threatened the operator's ability to pay for development work at Britain's biggest airports. Ferrovial FER.MC bought BAA two years ago, and the deal has saddled the company with ten billion pounds in debt.
RETAILING
WM Morrison (MRW.L) is set to slash up to 2,000 prices on grocery and health and beauty products. The move will take effect across its 375 stores. Britain's fourth largest supermarket chain also announced that it will introduce half price or better deals on 100 other items.
The Daily Telegraph
ABF TO MERGE RYVITA WITH JORDANS FOR HEALTHY GROWTH
Associated British Foods (ABF.L), the sugar to clothing conglomerate, will merge its Ryvita subsidiary with W Jordans & Sons in the latest boost for the health and food sector. ABF said: "Faster overseas expansion of the Jordans brand will be achieved using ABF's international grocery presence." The company will take a 62 per cent stake in the new venture after the cashless merger, and the Jordan family and associated shareholders will hold the balance.
BIFFA BUYOUT BANKS SELL ON THEIR ONE BILLION POUND OF DEBT
The banks that financed the 1.7 billion pound buyout of Biffa BIFF.L have managed to sell on all of the debt they provided for the deal, providing a potential boon for the infrastructure and private equity industries. The waste management group was taken private in April by a consortium comprising of private equity fund Montagu and Global Infrastructure Partners. It was one of the biggest buyouts completed in Britain this year.
FINCHAM VOICES HIS FAITH IN ITV PROGRAMME SUPREMOS
ITV's(ITV.L) new director of television, Peter Fincham, has given his senior programme commissioners a vote of confidence, despite the channel's difficult start to 2008. Mr Fincham said: "I think I've inherited a very good team. It's early days, but I hope and believe I'll be working with them for plenty of time to come." It was previously thought he was set to make big changes after Duncan Gray, the network's controller of entertainment, abruptly left after Mr Fincham's appointment was announced in March.
The Independent
MORTGAGE FRAUD OF 15 MILLION POUNDS PULLED B&B INTO THE RED
It was revealed on Monday that Bradford & Bingley BB.L would have remained profitable in the first four months of the year had it not been for a 15 million pound provision relating to mortgage fraud losses. The mortgage bank warned it was set to lose 15 million pounds "relating to a small number of organised mortgage frauds." The Association of Chief Police Officers claimed in March that mortgage fraud totalled 700 million pounds in the last year.
IMPERIAL ENERGY STRIKES OIL IN SIBERIA
Imperial Energy, the FTSE 250 oil and gas explorer, has announced its first new oil discovery on the Kiev Eganskoye field, causing its shares to soar six per cent to 1,040 pence. Richard Rose, Oriel Securities analyst, said: "On a risked basis, this result is likely to add 100-150 pence a share to our current NAV of 1,417 pence a share, based on 120 dollar a barrel oil prices."
SIRTRIS TO BECOME SUBSIDIARY OF GSK
Fountain Acquisition Corporation, a subsidiary of GlaxoSmithKline (GSK.L), has completed the tender offer for Sirtris Pharmaceuticals. The tender will see GSK take control of the group that specialises in developing drugs to fight age-related conditions, and is worth roughly 362 million pounds. Sirtris will become a subsidiary of GSK after FAC agreed to pay 22.50 dollars a share.
The Guardian
OFT RAIDS BARCLAYS AND RBS OVER ALLEGED COLLUSION
Barclays (BARC.L) and the Royal Bank of Scotland(RBS.L) confirmed raids on their premises by the Office of Fair Trading as part of an investigation into allegations of collusion over the sale of loans to professional services firms. An OFT spokeswoman said a probe "into alleged anti-competitive conduct in the financial sector" was underway and that 12 days ago the watchdog had "visited two sets of business premises."
SEVERN TRENT FACES HUGE FURTHER FINE FOR FAKING LEAKAGE DATA
A judge was urged to make an example of Severn Trent (SVT.L) at a sentence hearing at the Old Bailey. The company has admitted providing false data on leaks to Ofwat, and the prosecution believes its fine should be of sufficient magnitude to act as a "deterrent" to any other businesses tempted to bend the rules. Judge Jeremy Roberts said there were no sentence guidelines because there was no real precedent.
UBS AND CITI FORCED B&B TO SLASH PRICE OF RIGHTS ISSUE
UBS (UBSN.VX) and Citi, the City's biggest investment banks, forced Bradford and Bingley BB.L to cut the price of its rights issue amid fears that demand for the 300 million pound fundraising would be so slow they would be left with millions of pounds worth of shares. The investment banks had agreed to guarantee a price of 82 pence six weeks ago, but told B&B that 55 pence was more likely to be acceptable to investors.
Prepared for Reuters by Durrants
