PRESS DIGEST - Financial Times - Aug 20

TUBE STRIKE AVERTED AFTER PAY OFFER

The RMT union has called off a planned three-day strike that would have closed down large parts of the London Underground. The action was abandoned following six hours of negotiations between the union and Tube Lines, the private sector firm that maintains the Jubilee, Northern and Piccadilly lines. The RMT agreed to shelve its strike action after receiving an improved pay offer from Tube Lines. The union said the company increased the terms of its two-year pay offer to 4.99 percent in the first year and RPI plus 0.85 percent from April 2009.

SHOPPERS' INFLATION FEARS HIT 16-YEAR PEAK

The latest quarterly Basix survey by NOP for Barclays Capital has found that consumers expect inflation to rise to 4.7 percent over the next year, remaining close to such a level for two years. The survey, which finds consumers' inflation expectations to be at their highest since 1992, indicates that consumers are much more sceptical about future prices than the Bank of England, which expects inflation to be at or under two percent. The bank's monetary policy committee is set to release minutes on Wednesday from a meeting it recently held where it voted to keep rates at five percent, despite indications that inflation will peak at five percent or more this autumn.

CHARITIES SET TO FEEL THE PINCH

A survey by YouGov suggests that the economic downturn will have an impact on people's willingness to help charity organisations, with donations expected to be down by seven percent this year. The poll of over 2,000 individuals also reveals that a fifth of British people plan to reduce charity donations in an effort to balance their personal budgets. The Charities Aid Foundation, which allows people to make donations via financial products, said the value of money given had fallen in 2007 by 200 million pounds in real terms across the sector.

VIRGIN SET TO SEVER TIES WITH NIGERIAN VENTURE

Virgin Atlantic is in talks to put its 49 percent stake in loss-making Virgin Nigeria up for sale. The carrier was set up in 2005 following a bitter dispute with the country's government over the location of its domestic operations. Virgin president Richard Branson accused the authorities of using "Mafioso-style" tactics to force Virgin Nigeria to relocate its domestic services from the international terminal Lagos. Virgin Atlantic claims Nigeria's government reneged on a deal signed under the previous president allowing use of the international terminal. The country's incumbent administration argues that Virgin Nigeria's claim is not legally valid.

PWC TO SHAKE UP GLOBAL NETWORK IN EFFORT TO TAP EMERGING MARKETS

Price Waterhouse Coopers is set to announce a global reorganisation in line with the efforts of some of its sector peers that underlines a move towards the emerging markets. The group will be organised between the US, the UK and China to be led by the largest firms in each region. The move is designed to help the group distribute its expertise among growing regions such s India and the Middle East. PwC said the strategy would allow the strongest firms to be more directly involved in developing markets. Sam DiPiazza, global head of PwC, said: "This is about preparing us for working in a globalised world with heavy regional players."

ALLIANCE APPOINTS GARRETT-COX AS CEO

International investment trust and financial services group Alliance Trust has promoted Katherine Garrett-Cox to chief executive, making her the fifth female chief executive in the FTSE 100. Garrett-Cox replaces Alan Harden, who has been awarded the role of chief executive of ING Investment Management Asia/Pacific. Garrett-Cox said she would proceed with plans to roll out an asset management business in the next six to 12 months. Her remuneration is expected to be in line with her predecessor, who earned 450,000 pounds, including basic salary of 367,000 pounds.

A&L TOP BRASS IN GOLDEN HANDCUFFS

Alliance & Leicester's ALLL.L highest level executives are set to be awarded additional payments of up to 125 percent of their salary as part of Santander's retention scheme. The deal agreed by the Spanish group, which has made a 1.3 billion pound takeover offer, will out chief executive Dave Bennett in line for a one-off payment of up to 750,000 pounds if he stays at the group until November 2009. Santander is offering one Santander share for every three A&L shares plus payment of A&L's 18 pence interim dividend. The offer puts a value of around 335 pence on each A&L share.

BANDS CAPITALISE ON EMI TURMOIL

The commotion at EMI since Guy Hands' Terra Firma bought out the music group is giving bands an additional trump card to play during contract renegotiations. Los Angeles band 30 Seconds to Mars invoked a California law in July enabling them to exit a contract after seven years, but EMI filed a lawsuit for breach of contract. The band retaliated by claiming that Hands' takeover had contributed to their decision to leave. Lilly Allen used her blog to suggest that Terra Firma's job cuts had delayed the release of her next album. Nevertheless, the bands' moves are unlikely to affect Guy Hands' ability to pay back the five billion dollars in financing provided by Citigroup for the takeover.

3I BUYS PLOT IN FUNERAL DIRECTOR

Private equity group 3i (III.L) hopes to return to the European funeral services market through a deal to acquire a 75 percent stake in Spain's Memora Inversiones Funerarias. The stake is being sold by Spain's Acciona in a deal that gives Memora an enterprise value of 260 million pounds. The company runs a large network of funeral services throughout the Iberian peninsula and leads the sector in Spain. Acciona's stake in the business generated ebitda earnings of 16.2 million euros last year, but carried net debts of 37 million euros.

PERMIRA LIFTS INVESTORS WITH JET AVIATION SALE

Permira has secured the largest profit for its investors since the credit crunch by selling Jet Aviation to America's General Dynamics for five billion pounds. SVG Capital, Permira's biggest investor, said the deal resulted in a substantial return on its investment. The sale of the Swiss aircraft services group generated a return of 84.2 million pounds against an initial cost of 21.8 million pounds. Permira said Jet Aviation's maintenance and furbishing capacity had doubled, with sales up 18 percent a year and employee numbers increased by more than 2,000 to 5,600. The deal is expected to be completed by December.

Prepared for Reuters by Durrants.