PRESS DIGEST - British business - April 3

The Times

PILOTS' STRIKE THREAT PUTS MORE PRESSURE ON WALSH

British Airways (BAY.L) chief executive Willie Walsh is facing increasing pressure, as the airline lost 1.75 pence to 247.5 pence on Wednesday. The British Air Line Pilots' Association is readying a statement slamming Walsh and calling for more effective leadership of the group, while shareholder Axa Investment Managers' UK equities fund manager Richard Marwood wants to know how much the chaos at Heathrow's Terminal 5 will cost, saying: "I've read that it could reach 50 million pounds. A one-off cost we can live with, but if it drags on it risks damaging BA's reputation." Walsh is also under fire for blocking Balpa strike action over BA's planned OpenSkies launch.

CARPHONE MAY BID FOR TISCALI UK ARM

Carphone Warehouse (CPW.L) may bid for Tiscali's UK arm "at the right price," according to a source, though the mobile phone group on Wednesday night declined to comment. Tiscali on Monday said that it had appointed JPMorgan Chase and Banca IMI to evaluate strategic options targeting higher shareholder value. Market sources have put a price tag of between 550 million pounds and 650 million pounds on the unit. US mobile retail chain Best Buy has also been linked with a bid for the business and is already in partnership with Carphone Warehouse.

THREAT OF UNION ACTION CASTS CLOUD OVER 20 BILLION POUNDS AUCTION TO RUN SELLAFIELD

The Prospect, GMB and Unite unions have rejected a pay offer of two percent for their nuclear workers, the former's national officer for energy, Mike Graham, saying: "We are absolutely disgusted with the pay offer and it could well lead to industrial action. This is a time of the biggest change for Sellafield and we are being offered a very low reward." A spokesman for the nuclear plant said that the offer "is in line with the government's recently published public sector pay guidelines," and is "intended to help increase the efficiency of the business, which is a necessary step towards securing our long-term future."

The Daily Telegraph

M&S BID TO QUELL ROSE ROW

Marks & Spencer (MKS.L) has acted to appease investors angry over the promotion of Sir Stuart Rose to executive chairman by agreeing to a number of concessions. Indeed, the retailer is thought to have informed the Association of British Insurers that Rose will be put forward for re-election each year, that he will not be given a pay rise, and that a new, heavyweight non-executive will be appointed. The M&S board has, meanwhile, been backed by one of its top five shareholders, Invesco Perpetual, which described as "entirely appropriate" Rose's elevation.

13 MILLION POUNDS FLOOD BILL FOR SEVERN TRENT

Severn Trent (SVT.L) has disclosed that its bill for last summer's Gloucestershire flooding was less than first anticipated, at between 13 million pounds and 17 million pounds, following insurance recoveries of 16 million pounds; earlier estimates had been put between 25 million pounds and 35 million pounds. Severn, which lost 54 pence to 14.14 pounds, said it would meet Ofwat's operating costs target in the full-year. The water company has spent up to 110 million pounds on renewing infrastructure.

B&Q POACHES SUPERDRUG CHIEF

Euan Sutherland, chief executive of the Superdrug and Savers chains, has been poached by B&Q parent Kingfisher (KGF.L) to lead its UK operations - effective "in the next few months" - in the wake of a management overhaul instigated by new chief executive Ian Cheshire. Sutherland, who will assume day-to-day responsibility for B&Q, commented: "It is clear to me that there is much more potential to come from the ongoing programme of renewal at B&Q." Cheshire spoke of Sutherland's appointment as a "key step" in unlocking Kingfisher's vast potential.

The Independent

WOOLWORTHS SLASHES DIVIDEND DESPITE MOVE BACK INTO BLACK

Woolworths announced a two-thirds cut to its final dividend on Wednesday despite a return to profitability. Revenue was up 8.5 percent to 2.97 billion pounds with adjusted profits up 30 percent to 28.3 million pounds, but net debt also increased from 113 million pounds to 246 million pounds. The group set the final dividend payment at 0.17 pence, making a full-year payout of 0.6 pence compared with last year's dividend of 1.77 pence. Trevor Bish-Jones, chief executive, said: "We thought it appropriate to create a more sustainable balance between the return to shareholders and maintaining the investment needed to continue to develop the business."

CENTRICA MAKES U.S. MOVE WITH $300 MILLION DEAL FOR STRATEGIC ENERGY

Centrica (CAN.L) established a further foothold in America on Wednesday with the $300 million purchase of Strategic Energy, a barely profitable unit of Great Plains Energy that provides power to businesses and industry across 11 states but makes only $23 million on turnover of $2 billion. Sam Laidlaw, chief executive at Centrica, said the deal was "in line with our strategy of building on our growth platforms".

FIRST SEARCHABLE WEB-BASED TV CHANNEL LAUNCHED

The world's first searchable web-based television channel was unveiled on Wednesday by Blinkx, the online video search site. The peer-to-peer service is accessed via downloadable software and enables users to view entertainment and TV-quality news content from the firm's existing partners such as Ministry of Sound and ITN, as well as clicking through to extra features, links and related news on the internet. "It is about embedding the experience into the rest of the web, rather than just running on top of it," said Suranga Chandratillake, chief executive. Analysts say that in such a young market, working out how to make money and how to attract loyal customers will be crucial.

The Guardian

FILE SHARING 'MAY BE GOOD', SAYS EMI EXECUTIVE

EMI's new owners have poached a senior Google executive, Glen Merrill, to overhaul its global digital strategy. Merrill, who was chief information officer at Google and one of the architects of the company's successful 2004 flotation, said on Wednesday that file-sharing - blamed by the music business for a continuing slump in CD sales - was "not necessarily bad" and that Guy Hands, the Terra Firma chief executive who bought EMI last year, was "open to trying new models". Previous studies claiming file sharing can positively impact sales have been rubbished by the recording industry, but Merrill said: "There is academic research that shows file sharing is a good thing for artists . We should do a bunch of experiments to find out what the business model is."

CAUTIOUS CONSUMERS SAVE MORE AND MOVE LESS

Consumers are putting record amounts into building societies, taking out fewer mortgages and borrowing less against their houses, according to data released on Wednesday. The Building Societies Association reported that new receipts totalling 1.35 billion pounds flooded into its members' coffers in February, the biggest February inflow since 1997. Brian Morris, BSA spokesman, said: "Building societies have enjoyed another strong month as high interest rates and attractive products have encouraged people to save with societies. The economic uncertainty and volatility in stock markets have provided further incentives to put money in cash savings."

EU SEEKS CLEARER PICTURE ON STATE AID FOR CHANNEL 4

The European Commission launched a full-scale enquiry on Wednesday into the British government's proposed 14 million pound aid package for Channel 4's digital switchover, saying there were "serious doubts" that the aid met its strict criteria. Luke Johnson, Channel 4's chairman, has warned that its future as a serious public service broadcaster to rival the BBC is at risk, since without money from the public purse it will simply make commercial programmes. Neelie Kroes, EU competition commissioner, said: "The commission is firmly committed to encouraging the digital switchover process. However, it needs to make sure that any state support does not distort competition unduly."

Prepared for Reuters by Durrants