PRESS DIGEST - British business - June 12

The Times

VAUXHALL JOBS IN LIMBO AFTER MANDELSON SEEKS FRESH BIDS

Business Secretary Lord Mandelson and the German Economy Minister on Thursday effectively opened the auction for Vauxhall to new bidders, throwing the jobs of around 5,000 workers at the carmaker into doubt again. Mandelson said Britain and Germany had received only a memorandum of understanding from Canadian car parts supplier Magna International (MGa.TO), showing its intention to buy General Motors Europe GMGMQ.PK, and that they were keen to talk to other bidders. Fiat (FIA.MI) is understood to be still interested in buying General Motors Europe.

HOT PROPERTY? NO, BUT "SIEGE MENTALITY" HAS LIFTED

There are some encouraging signs that the housing market may be heading for a softer landing than previously thought. Mortgage approvals surged in April and the number of new buyer inquiries rose in May at their fastest rate in a decade. Capital Economics believes that property prices will fall by 10 percent this year, rather than by its earlier forecast of 20 percent, and Daiwa Securities forecasts an 11 percent fall this year against its earlier prediction of 14 percent. Despite the predictions of house price falls, home sellers are seeing more interest in their properties, and this will help to prop up asking prices.

The Daily Telegraph

DE LA RUE NAMED AS FRONTRUNNER FOR 400 MILLION POUND BIOMETRIC PASSPORT CONTRACT

Security and cash handling group De La Rue (DLAR.L) has said its identity systems unit has been selected as the preferred bidder to design and produce the UK's biometric passports. The government contract was awarded after an international tender process, and is expected to be worth around 400 million pounds over a 10-year period. The Home Office has said the new design of passport, to be introduced in 2010, will help to combat fraud. Shares in De La Rue rose by one penny to 826 pence following the news.

WOOD MACKENZIE STAFF QUIDS IN FROM CHARTERHOUSE DEAL

Over 100 employees of the Scottish energy consultancy and research group Wood Mackenzie could receive windfalls averaging one million pounds each following a potential sale to private equity firm Charterhouse Capital for 550 million pounds. The deal would rank as the biggest UK leverage buyout of the year, though the price tag is less than Wood Mackenzie's majority owner, troubled private equity company Candover (CDI.L) had hoped. Charterhouse, advised by HSBC, is in exclusive talks to buy the business after seeing off several rival bids. The 230 million pound financing for the deal will be provided by HSBC, Lloyds Banking Group and Nomura.

MOULD AND VAUGHAN PLAN EQUITY-RAISING

Property firm London & Stamford (LSP.L) is planning to raise more equity following a spending spree of 245 million pounds so far in 2009. The company is led by Raymond Mould and Patrick Vaughan, who have a reputation for successfully reading property cycles. They have already recorded valuation gains on the two properties that they acquired in the year to March 31, despite the global economic downturn. Mould said the company would be looking to add further high-quality, securely let properties to its portfolio, but warned that secondary assets would struggle in the present economic climate.

The Guardian

WEST BROMWICH BUILDING SOCIETY BATTLES FOR SURVIVAL

The Financial Services Authority attempted to broker a rescue of the West Bromwich building society on Thursday after auditors KPMG refused to sign off its accounts. The society attempted to maintain its independence by converting its debts of 185.2 million pounds into a new financial instrument to bolster its capital. City speculation has arisen that the FSA has secretly touted the society to potential white-knight bidders over the last two months. If its debt cannot be converted, West Bromwich's toxic loans may have to be nationalised, with its branches and customer deposits acquired by another financial institution.

HOMEBASE BOSS PLAYS DOWN TALK OF RECOVERY

Terry Duddy, the boss of Homebase and Argos, has reported better than expected sales figures but insisted that there is no real indication of consumer confidence returning. Like-for-like sales at Homebase increased by 3.8 percent in the 13 weeks to the end of May. It signified the first improvement at the DIY chain for two years. Sales at catalogue chain Argos were down 2.8 percent, though that was still better than many City analysts' expectations. Shares at parent group Home Retail Group (HOME.L) increased by five pence to 271 pence following the update.

TYCOON'S 75 MILLION POUND BIG YELLOW AND CARPHONE SELL-OFF

David Ross, the entrepreneur and Tory party donor, has raised around 75 million pounds by selling shares in storage group Big Yellow (BYG.L) and Carphone Warehouse (CPW.L), the mobile phone retailer he co-founded with schoolfriend Charles Dunstone. He sold his entire 9.02 per cent shareholding in Big Yellow for around 36 million pounds and 24 million shares in Carphone, a 2.6 percent stake, for almost 39 million pounds. He still retains 155 million shares in Carphone, worth over 250 million pounds.

The Independent

STERLING SOARS ON RENEWED CONFIDENCE

The pound climbed on Thursday to its highest level against the euro this year, reaching 1.1758 euros in early afternoon trading, as the UK currency reaped the rewards of the country's renewed economic confidence. The note of optimism in figures from the National Institute of Economic and Social Research, showing that the worst of the recession may be over, was also reflected in a report from the Council of Mortgage Lenders on Thursday revealing a 16 percent rise in home loans in April compared to March. Mortgage figures, however, are not unambiguously positive, with April's 35,600 approvals being 28 percent lower than the same month in 2008.

RIVALS FAIL TO BACK BT OVER CHALLENGE TO ONLINE VIDEO

The telecoms group BT (BT.L) has made public its campaign to charge the BBC and YouTube to send video over its network. A BT spokesman said on Thursday: "Bandwidth costs money, and files like movies and music take up a lot of that. The situation at the moment is that the ISP picks up the tab." Rather than support the telecommunication's group, many of BT's rivals came out against it, with one source close to the situation saying: "They know full well it's not going to change anything, but maybe they hope to add it to the agenda for Digital Britain." Lord Carter's report, Digital Britain, which will outline the government's vision of Britain's online future, is scheduled for next week, and BT might have attempted to "get the issue on the agenda", according to a rival. The BBC is understood to be unhappy with BT's tactics.

BRITAIN OPPOSES CALLS FOR PAN-EU WATCHDOG

The chairman of the Financial Services Authority, Lord Turner, said on Thursday securities clearing houses based in the City should not be regulated by a planned EU-wide watchdog. Alluding to the current plans, which would grant the planned watchdog a direct say over London-based clearing houses, Lord Turner thought a compromise was likely to emerge. "We believe we will end up with something that is a reasonable way forward. If one was absolutely confident that European supervision was going to be completely politics-free, in a neutral, technocratic fashion, we would be more relaxed about it," he said. Lord Myners, the Treasury Minister, also reiterated the message by saying Britain would defend the principle of national supervisors for financial institutions.

Prepared for Reuters by Durrants