PRESS DIGEST - British business - April 2

The Times

BIG SHAREHOLDERS LET IT BE KNOWN TOP LLOYDS BOSSES MUST GO

Lloyds Banking Group's (LLOY.L) institutional investors are pressing for the removal of chairman Sir Victor Blank and chief executive Eric Daniels in light of the swift rescue of HBOS (HAL_pa.L), whose toxic corporate loans pushed it into 11 billion pounds of losses. They have informed senior government officials that the top executives must go well before the group is sold back to shareholders, as their credibility is "compromised". UKFI, the agency that controls the State's 65 percent stake of the bailed-out bank, has acknowledged the concerns but expressed satisfaction with the "current management."

WAITROSE MAKES PIT STOP ON THE M25

Supermarket chain Waitrose announced on Wednesday a franchise deal with Welcome Break to open two stores at its motorway service areas (MSA) on the M40 near Oxford and on the M25 at South Mimms, Hertfordshire. The deal, seen as a step forward for Britain's motorway services industry, comes almost six years after Marks & Spencer (MKS.L) signed a similar agreement with Moto, the UK's largest MSA operator, to franchise its Simply Food brand. Waitrose said it aimed at opening stores in about half of Welcome Break's 24 sites. Commercial director Richard Hodgson said: "It's more than just testing the water. While it is a trial, we fully expect it to be a huge success."

BLUE OAR FOUNDER VANDYK APPOINTED CHIEF EXECUTIVE

On Wednesday, Blue Oar Securities appointed founder Edward Vandyk as its new chief executive with immediate effect, in a move that pushes Evolve Capital towards taking full control of the stockbroker. Vandyk is an executive director of Evolve, which acquired a 64.9 percent stake in Blue Oar during a challenging takeover battle just before Christmas. Vandyk's appointment comes less than two weeks after a planned merger between Blue Oar and rival stockbroker WH Ireland collapsed.

The Daily Telegraph

SOUTHAMPTON FC'S PARENT COMPANY FACES ADMINISTRATION

Southampton Leisure Holdings SOO.L, the AIM-listed parent company of Southampton Football Club, said it was facing the prospect of falling into administration over the next 12 months unless it secured urgent funding. The company, whose shares were suspended on Wednesday, unveiled it was in discussions with a number of groups about a possible cash injection. Its debt problems emerged after the spending of more than 30 million pounds on the St Mary's Stadium, Southampton FC's new home since 2001.

MECOM GETS THIRD STAY OF EXECUTION

Mecom (MEC.L), the London-listed newspaper group, has extended the date for a covenant test for a third time, increasing the spectre of a possible liquidation. The European newspaper business said it was still certain its negotiations with its banks would be successful despite the delay until the end of April. It also rescheduled the maturity dates of loan notes from mid-April until mid-May. Despite assuring investors that a solution to its mounting debt problems would be found, Mecom said that should "certain insolvency events arise", the maturity of the convertible loan notes will regress to the end of April.

GEM DIAMONDS WRITES DOWN MINES AS STONE PRICES DROP

Gem Diamonds (GEMD.L) has unveiled plans to raise 75 million pounds in an equity placing to shore up its balance sheet and help meet repayment obligations. Its announcement came as it posted a full-year pre-tax loss after taking asset impairment charges of 546.5 million dollars. Pre-tax loss for the year closed at 576.7 million dollars, compared with a profit of 68.4 million dollars in 2007, while revenue increased 94 percent to 296.9 million dollars. Chief executive Clifford Elphick said the impact of the economic crisis in the fourth quarter of 2008 caused rough diamond prices to fall significantly, provoking a change in the company's growth strategy and a dramatic downscale in its development projects.

The Independent

O2 TO CUT 160 JOBS AT CALL CENTRES

Around 160 workers at O2's call centres are to lose their jobs as part of a restructuring drive. The mobile phone company's Leeds call centre is set to be hit the most, with further redundancies expected at O2's Glasgow, Bury and Runcorn units. A spokesman said the company was introducing some new customer service roles, leading to a net cut of about 160 jobs. He said staff would be given the opportunity to receive further training and offer their services in other parts of the group. O2 declined to comment on the number of roles affected overall.

PENDAGRON IN LOAN TALKS

Pendagron, the car dealer, revealed it has entered discussions with its banks in a bid to make changes to its loan terms as part of a re-evaluation of its financing arrangements amid the economic slowdown. Its announcement came after the group's shares jumped more than 40 percent over the past week, edging up 31 percent at 9.35 pence on Wednesday. Pendagron's move follows the example of rival Inchcape (INCH.L), which said in December it was in discussions with its lenders for a possible change in its financing structure to help it get through a downturn in trading in 2009.

OFFER TALKS END FOR INNOVATION

Software group Innovation (TIG.L) announced on Wednesday that negotiations about a possible takeover with Carlyle, the private equity group, had been terminated, adding it had stopped being in an "offer period". In March, Carlyle issued a 15 pence a share approach for Innovation, which provides outsourcing services to insurance groups. "Carlyle's withdrawal is for reasons unrelated to the business or performance of Innovation, and no due diligence or formal discussions have taken place following receipt of its indicative approach," Innovation said. Its shares dived almost 32 percent on Wednesday to 4.88 pence.

The Guardian

POSTMAN PAT AND BASIL BRUSH COST HBOS 75 MILLION POUNDS AS ENTERTAINMENT RIGHTS COLLAPSES

Entertainment Rights, the company behind Postman Pat and Basil Brush, was placed into administration on Wednesday and its assets were sold to U.S. group Boomerang Media. Under the terms of the deal, the group's 90 staff in London, New York and Nashville will be transferred to the new company without any redundancies. The deal, which is likely to leave investors without receiving anything, was made for an undisclosed fee. The collapse of debt-laden ER is understood to have cost HBOS (HAL_pa.L), which is now part of the part-nationalised Lloyds Banking Group (LLOY.L), more than 75 million pounds.

TOM MCKILLOP RESIGNS FROM BP BOARD BEFORE RE-ELECTION VOTE

Sir Tom McKillop, former chairman of the Royal Bank of Scotland (RBS.L), quit from the board of BP (BP.L) on Wednesday, one day after his public row with City Minister Lord Myners over Sir Fred Goodwin's controversial pension scheme. He will step down at the group's annual meeting on April 16, seeking to avoid a protest vote against his re-election to the oil giant's board. BP chief executive Tony Hayward said McKillop's decision was not provoked by the board. Peter Sutherland, BP's chairman and a former dominant figure on RBS, is also planning to leave the oil group before next year's annual meeting.

ANALYSTS SUSPECT BT WILL ORDER ZERO DIVIDEND TO RAISE PENSION CASH

Goldman Sachs has joined the growing list of analysts saying that BT (BT.L) will be forced to scrap its dividend in a bid to deal with its widening pension deficit, estimated at eight billion pounds. The company is undertaking a triennial valuation of its 33 billion pounds pension fund, and analysts expect it to announce a cash injection of hundreds of million pounds into the fund when it releases its annual figures in May. BT, which has given three profit warnings since autumn, is also facing mounting pressure from huge writedowns in the value of some of its big IT contracts over the past five years.

Prepared for Reuters by Durrants