PRESS DIGEST - Financial Times - Jan 4

Financial Times

DARLING IN BANKS SHAKE-UP

As part of a regulatory shake-up by Chancellor of the Exchequer Alistair Darling, sweeping powers are to be given to the Financial Services Authority to intervene in failing banks in an effort to avoid a repeat of the Northern Rock NRK.L crisis. The new measures would allow the FSA to seize and protect the cash of depositors when a bank gets into difficulty, and thus head off the risk of a run on the bank. Under the new regime, Darling is to propose a series of "triggers", which will include a request from a bank for an emergency loan from the Bank of England that may see the FSA step in if the institution was in danger.

INFLATION PUSHES WAGE RISES TO FOUR PERCENT

Specialist pay analysts said on Thursday pay rises in the private sector are averaging four pe cent, with higher inflation triggering bigger increases. The figures, from Incomes Data Services, cover 30 deals involving more than 430,000 employees, mainly at the higher end of manufacturing in the motor industry, pharmaceuticals and chemicals. During 2007, median pay settlements ran at 3.5 percent. Key deals that come into effect this month include Network Rail maintenance staff at 4.8 percent and those for the plumbing industry and electrical contractors, at 4.5 percent and four percent respectively. However, Kodak staff have settled at two percent.

BAA UNIONS CALL OFF ALL STRIKES

The threat of a strike hanging over the UK's main airports has been lifted after representatives from unions endorsed a deal reached with BAA on Monday over plans to close the pensions scheme to new members. Unions and BAA will negotiate over the future of the scheme, averting strike action that would have affected 1.3 million air travellers.

RIVALS LIKELY TO FOLLOW NPOWER'S PRICE RISES

It is expected RWE Npower will today announce a double digit increase in electricity and gas bills for most of its four million customers. The move is likely to encourage rival energy suppliers to follow suit. There have been complaints from energy companies recently about the rise in wholesale gas prices over the last six months that have pushed up the cost of supplying gas to customers and generating electricity. On Thursday the wholesale price of gas for next day delivery was at 53 pence a therm, 44 percent above the price this time last year.

BANK SEES FURTHER CURBS ON CREDIT THIS YEAR

The Bank of England's quarterly survey of credit conditions has revealed access to credit became more difficult for both companies and householders in the last quarter. The survey shows that lenders "materially" reduced mortgage finance availability in the last quarter, suggesting an impact on the recent housing market slowdown. Some analysts said the survey, which was conducted at the peak of the credit market turmoil, may be more gloomy than was justified by the recent relative calm.

S&N AWAITS BID BATTLE VERDICT

Scottish & Newcastle SCTN.L said yesterday it would know by the end of July if it has won a legal battle to obtain full control of Baltic Beverages Holding, its Russian joint venture with Carlsberg (CARLb.CO). S&N has received a letter from the Arbitration Institute of the Stockholm Chamber of Commerce confirming that formal proceedings have started in the arbitration process over Baltic Beverage Holding. The brewer is trying to remain independent after rejecting a takeover approach from Carlsberg and Heineken. Carlsberg, together with Heineken, is facing a "put up or shut up" deadline of Jan. 21 to increase their 750 pence-a-share offer for S&N or walk away. S&N's shares closed at 734.5 pence, down 0.5 pence.

ACAMBIS UNVEILS POSITIVE RESULTS IN FLU VACCINE TRIAL

Acambis ACM.L, one of several companies trying to develop a single immunisation against all strains of pandemic flu, has revealed trials showed that its vaccine against all 'A' strains of the virus was well tolerated. The biotechnology group said it is now in talks with larger pharmaceutical companies to secure a development agreement. Acambis ousted its chief executive last March and has since begun to diversify away from biodefence. In November it coupled with Sanofi Pasteur to develop and market its West Nile Disease vaccine. Shares closed at 123 pence, up two pence.

FT PURCHASES MONEY-MEDIA

Money-Media, a U.S.-based provider of online information and news for mutual fund managers, has been purchased by the Financial Times (PSON.L). Money-Media had revenues of around 16 million dollars last year and the deal, which is for an undisclosed sum, involved the FT purchasing the company from Michael Griffin, its sole voting shareholder.

WASTE DISPOSAL SPENDING SET TO AID BIFFA AND SHANKS

Increased government spending on new incineration, waste treatment and recycling facilities should benefit UK waste disposal companies Biffa BIFF.L and Shanks (SKS.L). Research from Catalyst Corporate Finance suggests the UK will need to invest nine billion pounds in new treatment and incineration facilities so as to cut landfill to just 20 percent by 2020. Shares in both Biffa and Shanks fluctuated in 2007 but are now roughly at the same level as last year, with Biffa at 330 pence and Shanks at 230 pence.

AUTONOMY STRIKES SUBPRIME GOLD

The search software company Autonomy (AUTN.L) has struck a 70 million dollar deal with a large global bank, believed to be Citigroup, for software that allows businesses to quickly retrieve documents for lawsuits. The deal is by far the largest contract for the company to date and is the first sign that it may benefit from the U.S. subprime lending crisis. Banks are thought to be increasingly concerned about facing shareholder litigation over the losses they have taken in the subprime market and are putting their computer systems in order to meet any legal demands. Autonomy shares closed at 901 pence, up three percent

Prepared for Reuters by Durrants.