PRESS DIGEST - British business - June 5
The Guardian
CITI 'RAN A MILE' FROM B&B SHARE RIGHTS ISSUE
Citi, one of the investment banks underwriting Bradford and Bingley'sBB.L 300 million pound rights issue is believed to be the driving force pressing for the cash call to be repriced. UBS UBS.VX made it clear that it would continue to support the troubled cash call despite the profits warning. On Monday, Bradford and BingleyBB.L announced that Citi and UBS had agreed to a restructured and scaled-down rights issue at 55 pence a share.
HBOS URGES INVESTORS TO TAKE UP NEW SHARES DESPITE DROP.
Some 2.1 million small shareholders in HBOSHBOS.L have been urged to take up their new shares in a four billion pound rights issue and ignore recent falls in the value of its stock. The company has offered investors two new shares at 275 pence each for every five shares they own. Thousands of small shareholders are expected to "tail swallow" taking up as many rights as possible by selling existing shares. Since the rights issue was announced six weeks ago, the value of HBOS shares have fallen sharply.
CARILLION CALL
Carillion(CLLN.L) is likely to switch to the support services sector of the construction market. Confirmation of this could come as soon as next week. Its shares, which look cheap compared to its peers, should get a boost from the move. The company will give a presentation of its support services businesses on June 30. It is also expected to update the market on any fair-value adjustments relating to its recent acquisition, Alfred McAlpineMCA.L.
The Independent
KINGFISHER CUTS TARGETS AS DEPRESSD HOUSING MARKET SINKS.
Kingfisher(KGF.L), which owns B&Q warned on Wednesday that a slowdown in the housing market and wider economy has hit the DIY sector. Sales at B&Q were down 8.1 per cent over the February, March and April compared with the same months last year. The group which employs 73,000 people has reduced its full-year targets but has not revealed by how much. Chief executive, Ian Cheshire, said that most of the industry is expecting a year of market decline.
ORANGE BOSS PROMISES THE FUTURE IS BRIGHT, DESPITE 450 JOB CUTS
The new boss of Orange, Tom Alexander, has claimed he would make investments in customer services and network upgrades. He also promised to reduce the company's reliance on Indian call-centres and create 500 more customer facing jobs. He warned, however, that he would axe 450 middle management jobs to turn around a company that has suffered from years of under investment. Analysts have said that it was difficult to fault the strategy, however, Orange has provided few details about what results will be achieved.
BA FIGURES DOWN AS ECONOMY, OIL AND HEATHROW T5 TAKE.
British Airways(BAY.L) carried 0.7 per cent less passengers in May than the same month last year. Slowing economic growth, higher oil prices and fall-out from the opening of Terminal Five at Heathrow all deterred travellers. BA said on Wednesday that its load factor fell 1.5 per cent to 71.8 per cent, compared with a year earlier. It has also warned that it may have to cut capacity later this year to help with higher fuel costs.
The Daily Telegraph
INDIANS REFUSE TO SELL CADBURY GOODS
Cadbury(CBRY.L) received a blow on Wednesday as Pantaloon Retail, India's biggest retailer, refused to sell its products amid allegations of discrimination. Pantaloon Retail alleges that Cadbury gave preferential prices and treatment to rival retailers.
The dispute threatens to harm Cadbury's business in India where it holds a 71 per cent share in the chocolate market. It grew revenues by 20 per cent last year.
IG CASHES IN ON VOLITILE MARKETS
Spread betting company IG Group(IGG.L) said that it is on track to increase revenues by 50 per cent this year. Volatile stock markets have tempted punters to increase their bets. The company has said that its expansion into the US, Asia and continental Europe was paying off. The new businesses now account for 1.3 million pounds a month. IG said it expects to report an increase in revenue to about 184 million pounds for the year to May 31.
NORTHUMBRIAN WARNS OF WATER PRICE RISES AS COSTS INCREASE
On Wednesday, Northumbrian Water(NWG.L) became the latest utility to warn of higher water prices. The company said that it was aiming to keep bill increases as close to inflation as possible, however it admitted it would be a challenge. It has its current capital expenditure programme funded to around 2011. However, financial director, Chris Green said that Northumbrian would face higher cost of debt after that date.
The Times
VODAFONE SET FOR 30 BILLION DOLLAR DEAL TO MAKE IT NO 1 IN US
Vodafone(VOD.L) is in the final stages of completing a deal worth nearly 30 billion dollars that will see it become the largest mobile phone company in America. Vodafone and Verizon are in advanced discussion with Alltel. They have valued Alltel at about 27 billion dollars. Shares in Vodafone closed down five per cent at 154.56 pounds, the movement came before news of the talks became public.
MORE NORTHERN ROCK JOBS AT RISK AS BRUSSELS SEEKS TOUGHER.
The European Commission is pushing for Northern Rock to downsize more aggressively. This could lead to thousands of more job cuts. Regulators in Brussels have criticised the Government's rescue plan saying that the 27 billion pound loan could be paid back earlier than the target of 2010 if its market share is reduced more drastically than planned. Ron Sandler, chief executive, expects to cut Northern Rock's workforce by one third.
US TRADE UNION ATTACKS 'TWO FACED' TESCO
The United Food and Commercial Workers' Union has vowed to damage the worldwide reputation of Tesco(TSCO.L). It is pushing for recognition at Tesco's Fresh and Easy stores in the US. It claims there are stark differences between the rights and benefits enjoyed by Tesco's UK and US workers. Tesco said that its workers did not want to join the union.
Prepared for Reuters by Durrants
