PRESS DIGEST - British business - Oct 3

The Times

JAGUAR CALLS FOR U.S.-STYLE GREEN SUBSIDY FOR CAR INDUSTRY

David Smith, managing director of Land Rover and Jaguar, has called for government cash to boost the UK car industry as it faces the worst market in years. Speaking at the Paris motor show, Smith said the UK car industry was in need of the same kind of aid as in the U.S., where the government has pledged 14.2 billion pounds for the sector to invest in green technology. Smith called for government action to revive consumer confidence, including tax cuts, and for special assistance for the UK car industry, which is the country's largest industrial employer: "If the U.S. needs to take a bold move we do, too, and the quicker the better."

JOBS SAVED AS TOYOTA REVEALS NEW PRODUCTION PLANS FOR UK

Toyota (7221.T) announced on Thursday that its new Avensis model will be built at its Burnaston factory near Derby. The announcement safeguards almost 5,000 jobs, but the car maker warned that reduced working would continue until demand increased. Production of the car will begin next month and Toyota hopes that the new model will boost sales in the UK and Europe. The company will invest in the plant that is to produce the new model, but declined to say by how much. Toyota anticipates a ten percent decline in the European market this year.

M&G SUPPORT BOOSTS HOPES FOR TAKEOVER OF HBOS

The likelihood of Lloyds TSB's (LLOY.L) 12 billion pound rescue takeover of HBOS HBOS.L going ahead increased on Thursday after M&G, the investment arm of Prudential (PRU.L), said it plans to vote in favour of the deal. The decision came as HBOS's senior management solicited support for the deal from institutions. Lloyds shares were marked at 262 pence, valuing its all-share offer at 218.2 pence per share. HBOS climbed 14.85 percent to 170.1 pence -- a 22 percent discount to the offer. Although the gap has narrowed from 35 percent earlier in the week, the difference indicates that investors doubt whether the deal will proceed in its current form.

The Daily Telegraph

SHELL SET TO MOUNT 1.2 BILLION DOLLAR BID FOR REGAL

Royal Dutch Shell (RDSa.L) has made a proposal for a 1.2 billion dollar takeover of Regal Petroleum (RPT.L). Shell is believed to have written to Keith Henry, chairman of Regal within the past few days. Shell's 300 pence a share proposal represents a substantial premium over Regal's 83 pence closing price on Thursday and is likely to spark a bid battle. It is believed that a number of groups have approached Regal in recent months, including Russia's Lukoil and Gaz de France. A takeover would result in a fortune in excess of 180 million dollars for Frank Timis, Regal's founder and 15 percent stakeholder.

TELEGRAPH MEDIA GROUP PROFITS RISE

According to accounts filed at Companies House, publisher Telegraph Media Group saw operating profits rise five percent to 34.3 million pounds, while turnover grew by four percent to 354.9 million pounds in the year to December 2007. Pretax profits climbed 200,000 pounds higher to 9.9 million pounds as the company concluded a year of major structural changes. The difference between operating profit and pretax figures is mainly down to exceptional costs incurred from altering printing arrangements as production was shifted from London to Broxbourne, Herts. The group said its restructuring would leave it well-placed for taking advantage of structural market changes.

WPP MAY HAVE TO WORK WITH CEDAR IF TNS BID SUCCEEDS

Sir Martin Sorrell, chairman of WPP (WPP.L), may have to work with minority shareholder Cedar Rock if his bid to acquire Taylor Nelson Sofres TNS.L is successful. The fund manager said on Thursday it had raised its stake in TNS by acquiring 1.5m of its shares at 244.2 pence, taking its holding to 10.11 percent of the share capital. Sorrell needs to acquire over 90 percent of the shares if he is to oust the minority shareholders, but can still delist TNS if shareholders with 75 percent or more of the equity decide to accept the offer. A combination of TNS and WPP's research units would create the world's number two market researcher, behind Nielson.

The Independent

CITY WORRIES MOUNT OVER CHRISTMAS AT WOOLWORTHS

Woolworths WLW.L has been identified as one of the most vulnerable listed retailers as the sector prepares for a Christmas season that may the worst in over three decades. Panmure Gordon analyst Philip Dorgan pointed out that the company's weak stock availability in the run-up to the busiest trading period would make it a risky investment. Dorgan added that the retailer's product availability woes are also exacerbated by the fact that many suppliers have had their credit insurance cover trimmed last year. Panmure Gordon reduced its target price for Woolworths on Thursday from four pence to three pence.

LUXURY HOTELS GROUP SAYS DEMAND IS FALLING

Hotels-to-retail conglomerate MWB (MBE.L) has warned that demand across its businesses is likely to weaken, even though third quarter trading was in line with forecasts. The company said room rates had slipped due to a fall in corporate demand. MWB Business Exchange, its office-space venture, is likely to see its growth abate, while customer spending on food and drink is also declining.

LIPSY DUO TROUSER 3.5 MILLION POUNDS IN NEXT DEAL

Jeremy and Marcelle Stakol, the founders of fashion label Lipsy, pocketed 3.5 million pounds on Friday after the business was bought out by Next (NXT.L). The couple, who own 25 percent of the business, have sold the brand in a deal worth 17.4 million pounds. Next has bought the share capital of the group for 14 million pounds, while also paying off 3.4 million pounds in loans. Other undisclosed payments could follow depending on performance.

The Guardian

WOLFSON WARNS OF FALL IN PROFITS AS APPLE LOOKS ELSEWHERE FOR CHIPS

Wolfson Microelectronics (WLF.L), the manufacturer of semiconductors, warned on Thursday that falling sales of gadgets such as mobile phones and digital cameras would slash up to 20 percent from its end-of-year revenues. In a trading statement, the group explained it had experienced a "material reduction in order intake" as its customers reacted to the ongoing deterioration in consumer confidence. The news saw shares in the company plummet almost 25 percent lower. Wolfson expects fourth-quarter 2008 revenues to be in the range of 45 million to 50 million dollars.

THOMSON REUTERS COUNTS ON LITIGATION EXPLOSION

Thomson Reuters TRIL.L conceded on Thursday that growth rates in its markets business would be hit by the financial crisis. The division, which provides data to institutions, last year generated half of the group's revenue. Chief Executive Tom Glocer said: "There's no question that the growth is coming down." However, Glocer added that its products targeting legal professionals could benefit from the current turmoil: "You have to appreciate the explosion in litigation we are going to see in America".

DIY CAR MAINTENANCE AND BIKE SALES BOOST HALFORDS

Halfords (HFD.L) said demand for car maintenance and rising demand for bikes as commuters sought to avoid high petrol prices were helping it fight the economic downturn. The retailer said on Thursday that group sales slipped 1.1 percent lower on a like-for-like basis, though including new stores, sales were 1.5 percent higher. Chief Executive David Wild said: "The group's market-leading position, well-structured balance sheet and strong cash flow see it well positioned in these challenging conditions".

Prepared for Reuters by Durrants