PRESS DIGEST - Financial Times - June 11

Financial Times

CITY FEARS OVER EU RULES

A number of UK bankers and brokers have said the political furore surrounding Gordon Brown is threatening the government's ability to defend the City's interests from new European rules that could make it harder for them to compete with their continental counterparts. Tim Linacre, chief executive of Panmure Gordon, said: "You have to be worried about having a politically enfeebled prime minister whose thumb prints are all over the current regulatory system". Most leading figures in the City privately believe Labour is unlikely to champion the cause of the financial services sector, despite its contribution to the Inland Revenue.

DERIVATIVES BROKERS HIT AT FSA POLICING

Some of the world's largest derivatives brokers have criticised the Financial Services Authority's adoption of a tougher approach to regulating the industry and said that increased intrusion could result in a "standoff" with the watchdog. Speaking at the IDX derivatives conference in London, derivatives firms pointed out that the FSA was starting to question for the first time their corporate strategy. Nigel Avey, director of compliance and legal at MF Global, said there was a risk of a "lack of proportionality" in the FSA's dealings with those it regulates.

ECONOMIC GROUP CALLS END OF DOWNTURN

The National institute for Economic and Social Research has interpreted the first growth in industrial output in over a year as an indication that the recession passed its trough in March, with the economy returning to growth in April and May. The research group said the economy grew by 0.1 percent in May and 0.2 percent in April following a 0.5 percent contraction in March. The NIESR's conclusion that the recession had bottomed out came after industrial production rose by 0.3 percent in April for the first time in 14 months.

BT SEEKS END TO "FREE RIDE" BY VIDEO WEBSITES

BT (BT.L) has called for an end to what it describes as the "free ride" enjoyed by the likes on BBC's iPlayer and YouTube on its network. The group spoke publicly about the matter for the first time on Wednesday, when it said it aimed to start charging content owners for delivery over its broadband network. The remarks follow last week's accusation that the telecoms group has been "throttling" the performance of iPlayer at peak times. John Peter, managing director of BT's Retail consumer business, said: "We can't give the content providers a completely free ride and continue to give customers the (service) they want at the price they expect."

ITV BID TO CUT DEBT AND REFINANCING RISK

ITV (ITV.L) has offered investors in its 500 million euro fixed-rate bonds the option of swapping debt for cash and new notes as it moves to reduce debt and refinancing risk. The broadcaster estimates the exchange offer will reduce its 730 million euro debt pile by 150 million euros. The offer would see it swap existing bonds into roughly 30 percent cash and 70 percent new euro denominated bonds with a coupon of nine percent, which represents an increase of three percentage points. The new bonds will mature in 2014 instead of 2011. However, bondholders may turn down the offer since the increased maturity would place it behind other debt in order of repayment.

TURNAROUND EARNS SAINSBURY CHIEF 11 MILLION POUNDS OVER TWO YEARS

Justin King, chief executive of J Sainsbury (SBRY.L), has been awarded more than 11 million pounds in pay over the last two years after hitting the targets of the group's three-year turnaround plan. According to the group's annual report, King received the last part of the payout this year after completing the "Making Sainsbury's Great Again" programme in 2008. Under the strategy, King had to increase the supermarket chain's sales by at least 2.5 billion pounds in the three years to March 2008, while also raising group earnings per share by 21 percent. King has been increasingly mentioned as a successor to Stuart Rose at Marks & Spencer (MKS.L), but has insisted he wishes to remain at Sainsbury.

SSP SEEKS TO EASE DEBT TERMS

Swedish private equity fund EQT, which owns Select Service Partners, has drawn up plans to inject up to 100 million pounds of fresh equity into the UK railway food and drinks concession operator. The move is designed to encourage creditors to ease the terms of its debt. SSP, which operates brands such as Upper Crust and Caffe Ritazza, has struggled to cope with its 1.2 billion pound debt pile amid the recession and needs investment to expand its business. There is no plan to ask holders of the SSP's 1.1 billion pounds of senior debt to take a loss, but lenders will be asked to reduce interest payments over the next year.

HALFORDS HAPPY AT SURGE IN CAMPERS

Car accessory retailer Halfords (HFD.L) is preparing to sell more camping and caravan equipment as cash-strapped holiday-makers choose to stay in the UK. Chief executive David Wild said the company had been surprised by the number of tents it sold recently and said he expected sales of roof boxes to be strong in the run-up to the summer holiday season. Wild's comments came as the group's pre-tax profits fell from 90.2 million pounds in the year to March 28, 2008 to 77.5 million pounds in the 53 weeks to April 3, 2009 after 16.9 million pounds of exceptional charges. Excluding exceptionals, pre-tax profit rose to 94.4 million pounds.

CHARTER WARNS OF FURTHER SLIDE IN SHORT-TERM TRADING

Charter International (CHTR.L), the supplier of gas handling, welding and metal-cutting hardware, has warned of another fall in short-term trading at its main ESAB business. The group's shares lost 17 percent of their value after it announced plans to cut further capacity at ESAB. Chief executive Mike Foster said poor recent data on the state of German exports and a downbeat report from the World Steel Association had dashed hope of a sustained recovery in sales. Low activity in the automotive sector had hit sales of consumables supplied by Charter, and the group said a slowdown in shipbuilding might further hit trade later this year.

NEWRIVER RETAIL SEEKS TO RAISE 250 MILLION POUNDS THROUGH AIM IPO

NewRiver Retail, the specialist in retail property investment, is planning London's biggest initial public offering so far this year as it seeks to raise 250 million pounds via an issue of 110 million shares on Aim. The company expects its shares to be admitted to trading on June 24. NewRiver's board includes well-known names who plan to use their knowledge of the sector to take advantage of opportunities in the UK property market. The company will be chaired by Paul Roy, a former Merrill Lynch banker who is chairman of the British Horseracing Authority. David Lockhart, the founder of property fund manager Halladale, will be chief executive.

Prepared for Reuters by Durrants