PRESS DIGEST - British business - Feb 7

The Times

BP WARNS SAFETY WORRIES WILL PUT A BREAK ON GROWTH

British Petroleum (BP.L) has announced safety concerns will force the company to reduce growth in oil and gas production. Shortages of skilled personnel, escalating costs and supply chain problems were also among reasons given for the revision of production forecasts at Tuesday's presentation of BP's annual results. BP said this year's production would be around the same as the 2006 level of 3.9 million barrels per day, rising to four million bpd in 2009 and 4.3 million in 2012. Delivering the company's strategy update in his first presentation as chief executive-designate, Tony Hayward said BP would focus on "safe and reliable operations" while slowing activity in other areas to address safety and efficiency issues. Shares in BP finished the day down 2 percent.

RED KITE DEFENDS REDEMPTION CHANGE

Red Kite, the one billion dollar London-based hedge fund, has defended its decision to tighten up redemption terms for investors wishing to cash out. The fund has been damaged by recent falls in base metal prices but described the decision to increase redemption periods from 15 to 45 days as merely a coincidence, saying the plans were in place before January's falls. Although Red Kite is authorised by the Financial Services Authority, it is not a member of the London Metal Exchange.

C&W LOSES TO BT IN O2 INTERNET TIE-UP

Mobile phone operator O2 and former parent BT (BT.L) are to announce a strategic partnership to provide broadband Internet access for mobile users. BT beat rival Cable & Wireless (CW.L) to sign the two-year deal despite C&W having strong investor backing. After ceasing to market Bulldog, its consumer Internet service, C&W is eager to realise a return on its network by establishing partnerships and has secured a wholesale deal with Internet provider Pipex.

The Daily Telegraph

CAN CADBURY BURST WRIGLEY BUBBLE?

Cadbury Schweppes (CBRY.L) is set to launch its Trident brand of chewing gum in the UK as part of a 10 million pound campaign to take on Wrigley's, which commands 98.5 percent of the 240 million pounds spent on gum in the UK every year. Cadbury has traditionally been a minor player in the chewing gum market, but its acquisition of Adams in 2003 triggered plans for a fresh launch. The firm hopes market research at its 40-million-dollar "Gum Centre of Excellence" in New Jersey has hit on the best route to cracking the UK market for gum.

MORE SAINSBURY SHARES SNAPPED UP

UBS has sold 15 million shares in J Sainsbury (SBRY.L) in a move that has given rise to speculation that U.S. value investor Brandes has sold more shares in the supermarket. The placing comes as more of Sainsbury's long-term investors sell shares to hedge funds and arbitrageurs as the share price responds to bid speculation. Apax is rumoured to be the latest private equity group to be considering a bid for the supermarket group, whose shares closed 6.5 pence higher on reports more parties would join the bidding war.

INCISIVE TO BUY VNU BUSINESS PUBLICATIONS

Business information publisher Incisive Media is set to acquire VNU Business Publications. Incisive is believed to be in exclusive talks with owner 3i (III.L), which bought the business publications unit for 320 million euros last year after the Dutch publishing giant was acquired by a private equity consortium for five billion pounds. If the deal goes ahead, Incisive will have almost doubled in size since its 199 million pound buyout from Apax Partners.

The Independent

QATARI FOREIGN MINISTER BETS ON BID FOR SAINSBURY'S

Sheikh Hamad bin Jassim bin Jaber Al Thani, a member of the Qatari ruling family, has taken a 90 million pound bet on J Sainsbury's (SBRY.L) being taken over for up to 10 billion pounds by a private equity backed consortium. The sheikh disclosed on Tuesday that he has the equivalent of a one percent stake in the supermarket group. The development came as it emerged Texas Pacific Group TPG.UL is likely to join forces with the existing bid consortium rather than stage a rival bid.

BT EXPANDS IN INDIA WITH TAKEOVER OF FIXED-LINE FIRM

BT (BT.L) has become the largest foreign fixed-line operator in India following its acquisition of local firm i2i Enterprise, doubling its presence in the country. The Mumbai-based firm has assets of just 22 million dollars and employs 200 staff, but BT did not reveal how much it paid for the group. Andy Green, chief executive of BT Global Services, described the Indian business as a "fantastic platform to grow from" and added BT would invest tens of millions of dollars in i2i over the coming years.

SETANTA CHALLENGES SKY'S SUPREMACY

Setanta Sports is to launch a challenge in the sports programming market by launching on the Freeview platform with a monthly subscription fee of just 10.99 pounds. The offer, which will be available from March, seems to be designed to lure viewers from BSkyB (BSY.L). Setanta will offer Premiership matches from August, marking the first time in 10 years that top league football will be available on terrestrial TV.

The Guardian

UNIONS FEAR 450 PRU AND LLOYDS JOBS WILL BE LOST TO INDIA

Unions have accused Prudential (PRU.L) and Lloyds TSB (LLOY.L) of shifting 450 jobs to India as part of wider moves to cut costs through offshoring. Amicus said Prudential needed to disclose its plans for the UK business to avoid destroying morale. Prudential confirmed it would be moving back office operations from Reading and Craigforth to Mumbai. The union representing Lloyds TSB staff said the closure of the Peterborough processing centre was the result of previous offshoring that had seen 2,500 posts moved to India.

LATE OPENING HOURS HIT PROFITS, SAYS REGENT INNS

Pub operator Regent Inns REG.L reported a drop in half-year profits on Tuesday, saying trade was harmed as customers arrived later in the evening because of extended licensing hours. Nevertheless, sales rose over the Christmas and New Year period, boosting shares by 2.2 percent to 103.25 pence. Group operating profits, excluding one-off items, fell to 6.7 million pounds in the 26 weeks to December 30, from 8.5 million pounds a year earlier.

Prepared for Reuters by Durrants