PRESS DIGEST - Financial Times - Feb 7

DEVELOPING COUNTRIES DRIVE ACQUISITION SPREE

The Office for National Statistics has revealed merger and acquisition activity sourced in emerging markets more than doubled last year. Overseas firms spent 75.5 billion pounds buying UK businesses, 13.7 billion pounds worth of which arrived from developing nations, while the European Union and the United States accounted for 49.4 billion pounds' worth. Citigroup's Michael Saunders predicted M&A inflows would "stay quite high" this year "since the key drivers for the large overall M&A inflow -- rapid economic growth and current account surpluses in developing countries, UK openness to foreign M&A -- are likely to remain intact".

HIGH DEMAND FOR LABOUR PUSHING UP WAGE INFLATION

Pay and recruitment studies have shown high labour demand is lifting wage inflation. A report by the Recruitment and Employment Confederation and KPMG said demand for workers had hit a 27-month high, with the labour market's strength "maintaining substantial inflationary pressure on workers' pay". Financial recruitment group ECHM's operations director Kirsten MacLeod believes "2007 will be one of the strongest years for some time for recruitment within the financial arena", though she said "the real concern is whether companies will be able to find enough people with the right skills to fill these vacancies".

ROYAL MAIL LOSES EIGHT MILLION POUNDS TV LICENCE CONTRACT

Royal Mail GBPO.UL on Tuesday lost a contract worth up to 8.1 million pounds a year to manage the BBC's television licence mailings, losing out to Business Post Group BPG.L subsidiary UK Mail. BBC TV Licensing head of revenue management Beverly Tew said: "We are committed to achieving the best value for money and level of service for all TV licensing operations, which this new contract reflects." Royal Mail lost a 90 million pound BT (BT.L) contract three weeks ago to TNT Mail.

LLOYDS TSB UNION PENSION STUDY WARNS OF THREE BILLION POUNDS DEFICIT

Actuarial consultants at Hymans Robertson, retained by the Lloyds TSB (LLOY.L) group union, have arrived at a provisional valuation the pension deficit at the banking giant may be three billion pounds, or nearly three times the latter's own 1.1 billion pounds agreed estimate of 2005. The higher sum was calculated on assumptions relating to interest rates, inflation, investment returns and life expectancy that were more cautious than in 2005. The re-evaluation could mean an annual 400 million pounds is required to negate the deficit over a decade. The bank on Tuesday defended its financing arrangements, saying the Hymans Robertson review failed to factor in strong investment gains and increased funding since the 2005 valuation date.

RYANAIR STEPS UP NO-FRILLS BATTLE WITH GERMAN EXPANSION

Ryanair (RYA.I)> will open a third German base in June at Dusseldorf Weeze, a Royal Air Force base until 1999, in a move that poses increased competition to Lufthansa (LHAG.DE) and low-cost subsidiary Germanwings, Air Berlin (AB1.DE) and EasyJet (EZJ.L). Ryanair will initially locate two aircraft at Weeze, from which it will fly 10 routes, with Alghero, Alicante, Palma and Venice added to the existing London Stansted, Glasgow Prestwick, Rome Ciampino, Stockholm Skavsta, Shannon and Barcelona-Gerona routes.

ARM BULLISH OUTLOOK BUCKS THE TREND

ARM Holdings (ARM.L) announced a 10 percent profits fall for the fourth quarter, from 23.7 million pounds to 21.3 million pounds, attributable to a number of one-off operating expense increases. Revenues were eight percent up year-on-year to 68 million pounds, delivering full-year revenues 13 percent improved at 263.3 million pounds. Pre-tax profits were 11 percent ahead at 90.1 million pounds. Chief executive Warren East said he expected shipments of electronic products containing the group's technology to increase to 4.5 billion by 2010, adding: "We've barely scratched the surface yet."

CUTTS SELLS PARKRIDGE TO PROLOGIS FOR 500 MILLION POUNDS

U.S. company ProLogis (PLD.N) is to acquire industrial property group Parkridge in a deal worth in the region of 500 million pounds. ProLogis refused to comment on the deal, while Parkridge failed to return calls.

LATE HOURS LEAVE GLASS HALF EMPTY FOR REGENT INNS

Regent Inns REG.L announced a pre-tax profit fall from last year's 6.4 million pounds to 3.65 million pounds for the six months to December 30, with sales from continuing operations 4.6 percent down to 62.8 million pounds. Total sales were 11 percent up at 73 million pounds, factoring in the group's Old Orleans outlets. Executive chairman Bob Ivell said the majority of the sales decline was "attributable to liquor during early evening hours because customers are arriving later on the high street following licensing deregulation".

Prepared for Reuters by Durrants