PRESS DIGEST - Financial Times - June 30

The Financial Times

TORIES PLEDGE TO FIX RDA WOBBLE

Shadow Business Secretary Alan Duncan will say on Monday regional development agencies have become "a blancmange" under Labour and must be refocused towards boosting regeneration, developing skills and helping business. Duncan argues RDAs are evolving into an executive arm of government rather than being "a business-led force for good". He says agencies would be restructured under a Tory government.

FEARS OF WAGES SPIRAL REJECTED

Two of the country's leading pay and benefits specialists say fears of a return to a 1970s-style wages-prices spiral are not supported by recent wage settlements. Some recent private sector settlements, including a 14 percent two-year deal for Shell tanker drivers, have fuelled concern that workers will ignore appeals by the Chancellor of the Exchequer and Mervyn King, governor of the Bank of England, to curb wage demands. But Incomes Data Services said: "The current picture is a long way from describing a wages-prices spiral." Rival pay analyst Industrial Relations Services said fears of job losses as economic growth slowed would act as a brake on excessive pay demands.

HOUSE PRICES FALL FOR NINTH MONTH

The effects of the credit crunch have continued to weigh on the housing market, according to Hometrack, which said UK house prices fell for a ninth consecutive month in June. The housing research firm said in a survey released on Monday that average prices fell one percent over the month and 2.5 percent over the first six months of the year. The biggest drop in monthly house prices was in London, with an average fall of 1.3 percent.

C&W FINALISES 180 PENCE A SHARE BID FOR THUS

Telecoms provider Thus THUS.L could recommend a 180 pence-a-share bid from Cable & Wireless (CW.L) to shareholders as early as Monday morning. In a note last week, telecoms analyst at Investec Jonathan Groocock wrote: "We believe that 30 million to 50 million pounds of (operating expenditure and capital expenditure) synergies are available to C&W on integration of Thus. As such this would allow C&W justifiably to increase its (original 165 pence) offer to 180-200 pence, at which level we believe a deal could be done." Thus chairman Philip Rogerson reopened discussions with C&W chairman Richard Lapthorne last Thursday when it became apparent that rival bids were unlikely at this stage.

IBERDROLA BACKS PETROCELTIC IN ALGERIA

The Aim-listed Irish oil and gas company Petroceltic (PCI.I) has signed a deal with Iberdrola (IBE.MC), which is to take a 22.6 percent stake in the firm for 55 million dollars. The deal, announced on Monday, will give the Dublin-based company the funds it needs to continue its exploration programme in Algeria, giving Iberdrola, one of Europe's biggest energy groups, hopes of securing a much-needed supply of gas for the Spanish market.

ONLINE ORDERING HELPS OFFICE TO STRIDE AHEAD

The fashion footwear chain Office has emerged unscathed by the fall-out from the credit crunch to post rising sales and profits, one of the few clothing retailers to have done so. Driven in particular by the growth in online transactions, the company -- owned by Sir Tom Hunter's West Coast Capital -- reported a big increase in pre-tax profit from 3.6 million pounds to 5.5 million pounds. Chief executive Brian McCluskey said the sector, which has experienced a decade of falling prices, was being hit by "massive inflation". He said: "This year we are holding our margin but it is so difficult."

PWC AIMS TO EVOLVE TO MAINTAIN LEAD

Ian Powell, the new head of PwC, has said the professional services giant must become more agile if it wants to maintain and improve in its market-leading position. "If you're number one and you're not agile, you're a target," said Powell, who takes over the top job on Tuesday. "We're a relatively conservative industry, and we've been a relatively conservative organisation. Now it's time for us to really start to use our position as market leader."

ARKEX RAISES 30 MILLION DOLLARS FOR GRAVITY SURVEY SYSTEM

Arkex, the Cambridge-based developer of technology for oil and gas exploration, will announce on Monday it has raised 30 million dollars to expand its so-called Egg technology, which identifies hydrocarbon reserves by measuring tiny variations in the earth's gravitational pull. Three private equity firms, led by Ferd Venture Capital of Norway, have committed to invest in Arkex's third fund-raising round. Kitty Hall, chief executive of Arkex, said: "There's a terrific appetite for exploration, and oil companies have to push into new frontiers".

METALS GROUP TO JOIN AIM

Emerging Metals, which specialises in so-called minor metals that are used in new generation batteries and cells, is joining the junior Aim market on Tuesday on the back of growing demand for these commodities. The company is run by Stephen Dattels and Jim Mellon, well-known figures in the mining industry. It joins Aim having raised 13.5 million pounds since its foundation last year. The electronics, mobile and wireless telecoms market is driving demand for minor metals such as germanium, gallium and iridium.

INVESTOR TEST ON QINETIQ STAKE SALE

The government has instructed advisers Merrill Lynch to approach institutional investors about the sale of its estimated 250 million pound stake in QinetiQ (QQ.L), the defence technology group. The company was floated in 2006 and the government has long planned to sell its remaining 18.9 percent holding. "The government has always made it clear that ultimately it anticipates selling its entire financial stake in the company in order to realise its financial investment and to achieve best value for money for the UK taxpayer," the Defence Ministry said in a statement.

Prepared for Reuters by Durrants