PRESS DIGEST - British business - April 29

The Times

WHITBREAD ORDERS DOUBLE COSTA COFFEE AS SALES SOAR

Whitbread(WTB.L) confirmed on Monday ambitious plans to expand Premier Inns by 50 percent and double the size of its chain of Costa coffee shops over the next five years. The FTSE 100-listed leisure chain posted a 5.7 percent rise in like-for-like sales in the year to the end of February and increased the final dividend by 21.4 percent to 26.9 pence. Chief executive Alan Parker said that Whitbread had seen no sign of a slowdown in its markets. Trading in the two months since the year's end had followed a similar pattern, if not "a shade better", he said.

HBOS INVESTORS BRACED FOR FOUR BILLION POUND RIGHTS ISSUE

Shares in HBOSHBOS.L, the biggest mortgage lender in Britain, fell on Monday as investors braced for a four billion pounds rights issue. It was the only high street bank stock to fall, closing down 1.25 percent at 495.75 pence, compared with a 0.68 percent increase for the sector. The bank was understood to be finalising details of the capital-raising on Monday night, in preparation for a general meeting in Glasgow on Tuesday when they will be presented to shareholders. HBOS has so far escaped with only 227 million pounds in fair value reduction on its mortgage investments in the US and analysts were split on the potential for writedowns at the bank.

DESSERTS MADE IN DEVON WILL BE OFF MENU WHEN FACTORY SHUTS

Uniq, the maker of supermarket ready meals, has abandoned its dividend this year and announced plans to close its factory in Devon, with up to 400 staff likely to be laid off. It expects the closure of the plant in Paignton to cost around 20 million pounds and take about 18 months to implement. Increases in the price of dairy products, wheat, barley and meat have adversely affected the company, which makes desserts, chilled meals and snacks. "We've agonised over this decision for a long time," said Geoff Eaton, the chief executive.

The Daily Telegraph

IMMIGRANTS FLOCK TO STAGECOACH

Stagecoach(SGC.L), the rail and bus operator, said that road congestion and Eastern European workers had helped to boost passenger growth as it revealed that earnings per share were now expected to reach around 20 pence for the year to April 30 - more than 15 percent above analysts' forecasts. A flurry of analyst upgrades on the news - with Credit Suisse raising its pre-tax profits forecasts by 31.1 million pounds - saw the shares jump 27.5 pence to 248.75 pence. Martin Griffiths, finance director, said immigration was a factor in boosting passenger numbers. "They are typically very comfortable with public transport and natural users of bus and rail," he said.

LAURA ASHLEY HOMES IN ON MOSS BROS

Laura Ashley has further increased its stake in Moss Bross, the men's retailer, fuelling speculation that the homewares and fashion retailer famed for its floral prints could bid for the chain. Moss Bros has already received an indicative takeover approach from large shareholder Baugur, the Icelandic investment group, which has been carrying out due diligence. Laura Ashley has refused to comment on its intentions regarding Moss Bros. It increased its stake from 6.3 percent to 6.6 percent.

ARENA LAGS BEHIND AS PUNTERS MAKE TRACKS

Arena Leisure, the operator of racecourses including Windsor and Doncaster, reported a sluggish start to this financial year and blamed lower-than-expected attendances at its seven tracks and too many small fields. The company said the advent of winter evening fixtures had not proved as popular as hoped. Raymond Mould, chairman, told the annual meeting that despite a 31 percent rise in the volume of fixtures staged so far this year, "attendances at these fixtures have not been as strong as we would have hoped". The shares fell 4.25 pence to 39.5 pence.

The Independent

EUROTUNNEL TO TAP INVESTORS IN 900 MILLION EURO RIGHTS ISSUE

Shares in Eurotunnel(GETP.PA) GETq.L were frozen on Monday by the AMF, the French markets regulator, ahead of an "important" announcement to be made on Tuesday. The Channel Tunnel operator is expected to unveil a 900 million euro (700 million pound) rights issue, prepared by Lazard, and follows an 800 million euro offering of deferred shares last month. This will allow Eurotunnel to completely buy out its 1.6 billion euro in convertible notes and thus avoid paying the punitive rate of interest.

HSBC IN TALKS TO EXTEND EXCLUSIVITY DEAL WITH KOREAN BANK AS DEADLINE NEARS

HSBC(HSBA.L) is in danger of losing its exclusive status for the purchase of Korea Exchange Bank (KEB), a deal that was originally announced in early September. The South Korean authorities have insisted that they would not approve Lone Star's sale of 51 percent of KEB to HSBC, for 6.3 billion dollars, until all the legal matters connected with the private equity firm had been resolved. It is alleged that Lone Star's acquisition of KEB in 2003 was made at an artificially low price.

FRENCH VIDEO GAME MAKER BIDS FOR LARA CROFT COMPANY SCI

SCi Entertainment, which has been besieged by suitors in the past six months as its share price has plummeted, has received a bid from rival video game maker Infogrames Entertainment. The French company, parent of video game developer Atari, said: "Infogrames confirms that it has presented the SCi board with a detailed indicative offer for SCi that the Infogrames board believes has the potential to be significantly value enhancing to both SCi's and Infogrames' shareholders. The SCi board has declined, at this stage, to entertain Infogrames' offer."

The Guardian

MORTGAGE SQUEEZE TIGHTENS AFTER ABBEY CLAMPS DOWN ON INTEREST-ONLY DEALS

Abbey has tightened its conditions for low-cost "interest-only" mortgages, whereby borrowers pay interest but none of the capital debt. Interest-only borrowers with "a proven repayment vehicle in place" will be able to borrow up to 75 percent of a property's value, down from 85 percent, while those who cannot provide evidence of a repayment vehicle will be limited to 50 percent, thus reducing the risk to both the customer and to Abbey.

RAG TRADE RICHES: ASOS SALES SURGE

Turnover at online fashion retailer Asos surged by 90 percent to 81 million pounds for the year to end of March, according to chief executive Nick Robertson. The group reported a near doubling in sales and pre-tax profits will top analysts' forecasts, with a figure of about seven million pounds expected.

RBS CHIEFS STRUGGLE TO SELL THEIR STRATEGY TO DOUBTFUL INVESTORS

Investors in Royal Bank of Scotland(RBS.L) are concerned with the bank's plan to sell its Churchill and Direct Line insurance operations, which is intended to add four billion pounds to RBS's capital base, and comes on top of the planned 12 billion pounds rights issue. Less than two months ago RBS insisted that it did not need to raise cash, but the about turn could see shareholders left holding shares in a smaller group without the profitable insurance arm. Sir Fred Goodwin, chief executive, has made it clear that a partial stake in the business may be sold, rather than the entire business, and that if the price is not high enough it may not be sold at all.

Prepared for Reuters by Durrants