PRESS DIGEST - British business - Nov 1

The Mail on Sunday

TRAVELODGE AXES 15 HQ STAFF

In an effort to contain costs, Travelodge [DUBAHT.UL] has shed 15 head office staff and four regional workers. A spokesman for the budget hotel chain confirmed the redundancies, noting that the group is currently engaged in a price war and needs to keep costs down. No further redundancies are expected. Travelodge recently cut prices from 29 to 19 pounds-a-night and is competing for market share with rivals Premier Inn and Holiday Inn Express.

EASTERN FOCUS FOR GSK

According to analysts, GlaxoSmithKline (GSK.L) may seek to expand in India or China as it takes its acquisition strategy to emerging markets. Robin Davidson of Edison Investment Research says China and India are attractive to GSK because they have a large number of companies which make vaccines and biologics, the two areas in which GSK wants to expand. GSK chief executive Andrew Witty made his desire for diversification clear when he announced third-quarter results last week.

RANK LASHES OUT AT GAMBLING TAX

The chief executive of Rank Group (RNK.L), Ian Burke, has written to the Treasury appealing for changes to gambling tax. He requests the newly raised bingo tax be cut from 22 percent to 15 percent and that poker games should be taxed less stringently than casino games. He also says there should be no increase in tax on fruit machines. Burke describes the social and economic damage resulting from these taxes and points to the closure of 100 bingo clubs and 14 casinos and the loss of thousands of jobs.

The Sunday Times

HOLLYWOOD BACKING UK DIGITAL FILM MOVE

Odeon and UCI Cinemas is poised to roll out a new generation of digital projectors after securing 35 million pounds in funding. The move comes ahead of the release of a new batch of 3D films and Odeon has won the backing of three Hollywood studios. The film industry is eager for cinemas to upgrade technology in order to allow 3D releases to be seen as intended and also allowing them to increase ticket prices. Under the terms of the deal, Digital Deployment Associates, a tax-efficient vehicle backed by private investors, will buy the projectors for Odeon.

CURTAIN UP ON 100 MILLION POUND THEATRE DEAL

Ambassador Theatre Group is currently in the process of finalising the acquisition of the majority of Live Nation's 17-strong theatre estate. The deal, thought to be valued at just under 100 million pounds, will create the country's biggest theatre chain. The new chain will also dominate London's West End, where rivals include Lord Lloyd Webber's Really Useful Group. The acquisition was financed via increased bank borrowing and cash raised from shareholders -- including property magnates, stage impresarios and media executives.

EMAP ASKS FOR HELP ON LOANS

Emap [EDNCOP.UL], the business publisher part-owned by Guardian Media Group [GRMDG.UL], has asked lenders to relax next year's loan covenants in order to allow it greater flexibility to invest in the business. GMG's private equity partner Apax has already written off its investment, while GMG has agreed to let Emap pay down its debts before taking money out of the business. Emap reported earnings of 42 million pounds in the six months to September, three percent down on last year.

The Sunday Telegraph

BA FACES RECORD LOSSES AS WINTER STRIKES LOOM

City analysts predict British Airways (BAY.L) will report pre-tax losses of 252 million pounds for the first half of the year. A threatened strike by cabin crew over changes to working practices is also likely to add to the airline's problems with a court ruling expected on Thursday on union Unite's application for an injunction to stop the changes. Officials at BA fear passengers will not book with the airline amid threats of strike action, a move that could potentially increase the pre-tax loss of 401 million pounds recorded in the last financial year.

CADBURY'S STARTING PRICE IS UNREALISTIC

Cadbury's (CBRY.L) 850 pence-a-share has been labelled unrealistic by Kraft (KFT.N) as a starting point for takeover talks as analysts said it was unlikely another bidder would enter the battle. Kraft pointed to comments made by Cadbury shareholders who indicated 820 pence as a more appropriate price. Kraft has until November 9 to make a formal offer or walk away.

BAE COMPETES FOR VITAL FOUR BILLION POUND ARMY CONTRACT

BAE Systems (BAES.L) will go head-to-head this week with General Dynamics (GD.N) of the United States in a bid for the first stage of a four billion pound contract to build armoured reconnaissance vehicles for troops in Afghanistan. The proposals must be submitted by November 5. Winning the contract would help secure hundreds of jobs at BAE which last week announced it was cutting 217 jobs in Newcastle and 144 at Telford. A decision on the contract is expected in the first quarter of 2010, but BAE has made no decision where the work would be undertaken if it is successful.

The Independent on Sunday

CATTLES' SAVIOUR LANDS MAJOR ROLE AT RBS AS PART OF GROWING RESTRUCTURING TEAM

Laura Barlow will join Royal Bank of Scotland (RBS.L) to head its growing UK restructuring team. Barlow will join the bank in the new year. At present, she is a managing director at AlixPartners where she played a key role in the turnaround of failing sub-prime mortgage lender Cattles. She is also chief restructuring officer at Sea Containers, the transport firm that emerged from Chapter 11 bankruptcy protection in the United States earlier in 2009. An estimated three-quarters of RBS's global restructuring team is based across six UK offices including London, Edinburgh and Leeds.

PALI "PULLS PLUG" ON CITY OFFICE

Stockbroker Pali International is to close its research and sales operation in the capital, with a City source suggesting that Pali's U.S. owners looked ahead to next year and decided that it was time to pull the plug on large parts of the business in London. The source also suggested that others could make similar cuts in the next six months. According to figures filed at Companies House, Pali's operating profit was just 285,309 pounds for the year to the end of June 2008.

TREASURY TO RECALL BT PRIVATISATION IN DRIVE TO SELL BANKING SHARES

UKFI is studying the 25-year-old privatisation of BT (BT.L) as it prepares to sell 60 billion pounds of shares in Lloyds (LLOY.L) and RBS (RBS.L). It hopes to use some of the methods by which BT was privatised to carry out the sales. In 1984, the 3.9 billion pound sale of BT was the world's largest ever flotation, and the first one to offer shares to the public. It took nine years to sell all of BT's shares and it may take as long as that to sell the bank holdings.

The Observer

TREASURY REFUSES LLOYDS PLEA TO DROP 14 BILLION POUND LENDING PLEDGE

The Treasury will not allow Lloyds Banking Group (LLOY.L) to break its promise to lend an extra 14 billion pounds to homes and businesses, which the bank said it would do when it joined the government's asset protection scheme. Chancellor of the Exchequer Alistair Darling is expected to decide that the bank should be allowed to withdraw from the scheme, but Lloyds needs to find up to 23 billion pounds in extra capital in order to do this. Eric Daniels, the bank's chief executive, is close to launching a record 13 billion pound rights issue.

WILL GATWICK TAKE OFF AS PLANS STALL FOR HEATHROW?

BAA FER.MC has decided not to submit a planning application for its third runway in London until after the next election. Campaigners are also optimistic about stopping similar expansion at Stansted and Gatwick, which BAA has recently sold to Global Infrastructure Partners. BAA now has to watch as its competitors potentially start expansion at Gatwick, which air transport consultant Peter Morris says would be a pragmatic focal point for government expansion plans despite campaigners' opposition.

Prepared for Reuters by Durrants