PRESS DIGEST - British business - June 8

The Sunday Times

BEAN WINS NO2 POST AT BANK TO REPLACE LOMAX

The Bank of England's chief economist, Charlie Bean, will get the job of Bank deputy governor to replace Rachael Lomax. The move follows a battle with the Treasury over whether the job should have been given to a financial-stability expert following the Northern Rock debacle. Bean will be confirmed in the job within the next two weeks, and Alistair Darling could formally announce the move when he addresses the annual Mansion House dinner in the City on 18 June.

QATARIS PAY OFF TAYLOR AFTER SAINSBURY DEBACLE

Paul Taylor, the Qatari government's British-based investment partner, who led its abortive 10.5 billion pound takeover bid for J Sainsbury(SBRY.L), has been officially dumped by his Arab paymasters. Taylor was dismissed last week, and the Qatar Investment Authority is buying out his 50 per cent stake in its Delta fund for an undisclosed sum. Consequently, the QIA will take ownership of all investments made since Three Delta's creation. It is understood that both sides have agreed a joint statement confirming the divorce.

AILING NEXT CUTS BONUS TARGETS

Next(NXT.L), the high-street retailer, has become the latest FTSE 100 company to scale back targets for its executive-incentive plan. Next has priced its new scheme to pay out at a far lower level than the current deal after its share price more than halved since last summer. Last week, Marks & Spencer (MKS.L) cut the earnings target for chief executive Stuart Rose amid rising concern that big companies are making life easier for managers. Next's new plan is expected to pay out at between 16 pounds to 20 pounds, which is much less than an existing scheme that will see Next executives miss out on a 13 million pound windfall next month.

The Sunday Telegraph

PHARMACY GIANT GIVES UK THE BOOT

Alliance Boots [AB.UL] has switched its headquarters from Britain to Switzerland in a further blow to Britain's status as an international centre for business. Its executive deputy chairman, Stefano Pessina, said the relocation occurred largely because of Switzerland's status as a hub for European healthcare companies. Mr Pessina said: "The evolution I have seen over the past year is not the direction that you'd expect from a country that is business friendly. It was fantastic and now I have the feeling they are going in the opposite direction."

NETWORK RAIL MAKES TRACKS TO FIND REPLACEMENT CHAIRMAN

Network Rail has begun its search to find replacements for its chairman Sir Ian McAllister and at least two non-executive directors. The company has asked Egon Zehnder, its retained headhunter, to test the market for a possible successor to Sir Ian, though he has no immediate plans to step down. Sir Ian has chaired the Government-backed Network Rail since it replaced Railtrack in 2002, and was knighted in the New Year Honours for "services to transport" just as the company was handed a record 14 million pound fine from its regulator.

FORMER TORY LEADER TAKES THE REINS AT RACECOURSE OWNER

Michael Howard is to become chairman of Northern Racing, the racecourse company that is controlled by the Reuben Brothers. The former Conservative Party leader will lead the board following the 90 million pound acquisition of Northern Racing by the property magnates David and Simon Reuben in April last year. The company owns nine racecourses across the country and accounts for 14 per cent of the fixtures in the UK through its more than 200 race meetings.

The Observer

BRITISH ENERGY TO AGREE TEN BILLION POUND EDF TAKEOVER

The board of British EnergyBGY.L is expected to recommend a ten billion pound takeover bid by EDF(EDF.PA) within a fortnight, and an announcement could be made as early as this week. RWE(RWEG.DE) and Iberdrola(IBE.MC), the remaining two bidders, have not formally withdrawn from the auction. However, this weekend sources said that it would be unlikely that either would now table a firm offer for the nuclear generator. Centrica(CNA.L) is keen to strike a side deal once the identity of the new owner of British Energy is confirmed.

WATCHDOG FEARED A BANK RUN ON B&B

It has come to light that the Financial Services Authority feared a run on Bradford & BingleyBB.L if news leaked that the lender was struggling to put together a rescue package. The FSA, the Treasury and the Bank of England were horrified at the thought of "another Northern Rock", with savers queuing at branches to get their money out. Sources say that Sir Callum McCarthy, FSA chairman, and chief executive Hector Sants put "intense pressure" on the B&B board to come up with a solution. Chancellor Alistair Darling and Gordon Brown were also kept appraised of developments amid fears of an "incendiary" political fallout.

O'BRIEN ATTACKS IN&M'S MANAGEMENT STYLE

This week, Denis O'Brien will publish a damning report criticising the way Independent News & Media is run. The report is expected to criticise corporate governance arrangements at the group, and to claim that a number of executives on the board are compromised by their long term association with chairman and chief executive Sir Tony O'Reilly. IN&M had previously issued a report written by a Harvard Business School professor last week that found that the board was "functioning effectively."

The Independent on Sunday

PHIPPS IN THE FRAME FOR THE HEAD OF UK BUSINESS VACANCY AT.

Legal & General's(LGEN.L) former head of UK operations, Robin Phipps, is believed to be on an early shortlist of candidates drawn up to fill the vacant role of head of UK business at Standard Life(SL.L). A source said: "If Phipps is not interested then I can't see anyone being in place until the end of the year at the earliest." JCA Group, the executive headhunter, is understood to have sounded Phipps out about a possible return to the insurance fold just one year after he quit his role at L&G to "play more golf."

B&B LAUNCHES CHARM OFFENSIVE TO WOO INVESTORS

This week, Rod Kent, the chairman of Bradford & BingleyBB.L, will launch a charm offensive to persuade furious shareholders that the new rights issue and rescue package put together last week with TPG was the only way to protect the bank. On Friday, Mr Kent said: "We want to explain to them why bringing in TPG was the best option for all shareholders." The embattled chairman added that he was also keen to reach B&B's army of 950,000 small shareholders, who owned about 40 per cent of the bank.

SNUBBED MACQUARIE REJOINS THE BIDDING FOR TRILLIUM

The Australian investment bank Macquarie is back in the race for Trillium, the outsourcing and infrastructure arm of Land Securities(LAND.L). The property giant snubbed Macquarie when it cut the number of bidders down to three last month, but the bank has now tamed up with Telereal, one of the successful teams. If the consortium's bid is successful, Telereal, which is owned by William Pears Group, is likely to take Trillium's property assets, and Macquarie those related to Private Finance Initiative-type investments.

The Mail on Sunday

SALES SHOCK TRIGGERS ALARM BELLS AT M&S

Amid a downturn that retail experts describe as the worst to hit High Street clothes stores for five years, Marks & Spencer(MKS.L) is losing market share to its rivals. The decline, which comes with the retailer under fire from shareholders for its executive pay packages, is particularly in the critical womenswear market. A spokeswoman said: "We have been sharpening our prices to offer great value to our customers and inevitably there has been a drop in our market share in value terms. However, we are growing volume market share ahead of all our competition."

NATIONWIDE BOSS'S ONE MILLION POUND WAGE RISE

According to documents, Graham Beale, the new boss of Nationwide, received a near-one million pound pay rise last year, ahead of the mutual's report and accounts to be published this month. Nationwide is now the country's second-largest provider of savings accounts, and in the wake of the near-collapse of Northern Rock, has attracted almost one pound of every five pounds of new deposits. A Nationwide spokesman said on Friday that Mr Beale's pay "took into account a very strong performance in a demanding year."

MUTUAL RIVAL COULD POUNCE ON CATHOLIC

Catholic Building Society could soon be taken over by a rival after it was set up 48 years ago to give single women and widows a chance to buy their own home. A strategic review has been conducted at the insistence of the Financial Services Authority, which is concerned about the position of some of the country's 59 remaining building societies. Catholic Building Society has found it increasingly difficult to fund its business in recent months, despite good connections with charities and the Vatican. On Friday, Ivan Gould, chief executive, confirmed that the review was drawing to an end and that independence remained the "favoured option."

Prepared for Reuters by Durrants.