PRESS DIGEST - British Sunday business press - June 22

The Sunday Times

ITV AIMS TO SAVE 150 MILLION POUNDS BY CUTTING PUBLIC SERVICE

ITV (ITV.L) is aiming to cut 150 million pounds from its budget for public service broadcasting by 2012, when the analogue television signal will be switched off. The broadcaster is calling on Ofcom to permit a relaxation of the broadcaster's licence requirements over the next three years. ITV's executive chairman, Michael Grade, believes the economic value of subsidised spectrum will be worth 40 million pounds a year beyond 2012, and he is proposing to spend no more than that on public service broadcasting. Such a change would free more schedule time for advertising-friendly genres such as entertainment and drama.

BP PARTNER SET OFF PROBE BY KREMLIN

A Kremlin investigation into BP's (BP.L) Russian joint venture was sparked by a letter from one of the four oligarchs who own half the business, according to reports. Since the start of the year, TNK-BP has been subjected to a number of investigations into its tax affairs and work permits for foreign workers. It has now emerged that at least one of these investigations can be linked back to German Khan, who works as an executive at TNK-BP. Mr Khan was instructed by the venture's chief executive, Robert Dudley, to renew 150 work visas for expatriate specialists and engineers employed by the company. However, Mr Khan applied for only 63 permits, and this mismatch led to an inquiry by the immigration authorities.

DEBENHAMS TO DELAY PAYING BILLS AS SALES TUMBLE

Debenhams (DEB.L), the department store chain, has extended its payment terms to suppliers to 96 days amid claims that trading conditions are "deteriorating". The business denied it was lining up an emergency rights issue after it lost 18 per cent off the value of its shares on Friday, closing at 44 pence. Mike Dennis, Piper Jaffray retail analyst, set a 17 pence price target for the stock, and wrote: "We believe Debenhams is struggling to generate cost savings of 20 million pounds and net debt reduction of 140 million pounds for next year, as department-store sales keep falling and costs are rising."

The Sunday Telegraph

VAN-MAKER SEEKS REPAIRS WITH BROKER APPOINTMENT

Tanfield (TAN.L) is seeking to repair its relations with the City by appointing a "tier one" broker and bringing in a heavyweight non-executive director. In the past the vehicle manufacturer has been criticised for poor investor communications and disclosure. A source said: "They're looking to add another advisor rather than replace one of the existing brokers but they've not yet come to a final view." The move comes following pressure from leading shareholders who have expressed discomfort about the company's share price, which has fallen by 65 per cent over the last year.

MONRO PLOTS HIGH STREET RETURN WITH BACKING OF BUYOUT FIRM PERMIRA

Angus Monro is enlisting the support of Permira [PERM.UL] to target some of Britain's ailing high street retailers. Mr Monro will target a struggling chain with a turnover of at least one billion pounds as he assembles a war chest. He is believed to have secured backing from Permira, one of Europe's largest private equity firms, and is in talks with other private equity houses. Mr Monro said: "A lot of privately-owned retailers are breaking some of their soft covenants at the moment. By the end of the year they will break harder covenants and the banks will be in the driving seat."

LLOYDS TSB TARGETS SIX BILLION POUND DRESDNER

Lloyds TSB (LLOY.L) has drawn up detailed proposals for a takeover of Dresdner DRSDgd.F as part of a review of business opportunities in Germany, Europe's largest banking market. Its evaluation of a potential offer for Dresdner, the banking arm of Allianz (ALVG.DE), underlines its intention to capitalise on declining banking valuations across Europe. It is likely that Dresdner will command a price tag of at least 6.3 billion pounds, and would provide a buyer with one of the biggest retail banking networks in Europe.

The Observer

TRAVELODGE SWALLOWS 700 MORE ROOMS

This week, Travelodge TVLG.PK will reveal a 70 million pound investment in new hotels as it plans to cash in on demand for cheaper accommodation. The group has added nearly 700 rooms to its portfolio, by acquiring two Swallow hotels and changing contracts on a further five. The budget chain is expanding rapidly, with Grant Hearn, its chief executive, aiming for 40 hotel openings a year. Earlier this month, Whitbread (WTB.L) said underlying sales had increased 10.7 per cent in the three months to May as cash-strapped executives traded down to budget hotel rooms.

FOUNDER OF FOXTONS MAY BE PLANNING A RESCUE BID

Jon Hunt, the founder of Foxtons, is thought to be considering reinvesting in the estate agency chain he sold for 390 million pounds at the height of the UK property boom last year. Sources speculate that the entrepreneur could be lured back at a discount to help it meet interest payments on its substantial debt. BC Partners, the purchaser which funded the deal with about 260 million pounds of debt, is thought to face crippling annual interest charges. Mr Hunt started Foxtons in 1981, and it had 21 offices and sales of over 100 million pounds by the time it was sold.

PROFITS STAY ON CONRAN'S MENU

D&D London, the restaurant chain half owned by Sir Terence Conran, has registered an 18 per cent revenue increase to 71 million pounds. Operating profits rocketed 10 per cent to 4.6 million pounds. Des Gunewardena, chairman, said: "These are good results in the context of a more difficult economy in the second half of the year." Buyers are also lining up to buy Sir Terence's 51 per cent stake in the business, which includes Bluebird, Quaglino's and Skylon. It is thought a deal could be worth over 100 million pounds.