PRESS DIGEST - British business - May 11

The Sunday Times

BAE BOSS SET TO LAND AT BABCOCK

Mike Turner, outgoing chief executive of BAE Systems (BAES.L), is in negotiations to become chairman of support services group Babcock International (BAB.L) when its current chairman Gordon Campbell stands down next year. Turner, on the Babcock board in the late 1990s, will initially join as a non-executive director. Confirmation of the appointment could be made alongside a strong set of results which Babcock is due to announce this week.

AMERICANS LOOK INTO RBS SUB-PRIME DEALS

Royal Bank of Scotland (RBS.L) is being investigated by the U.S. Securities and Exchange Commission over its exposure to American sub-prime mortgages. The probe, launched in March, covers the bank's interests in securities backed by sub-prime home loans, as well as residential mortgages written by U.S. subsidiaries. Details of the investigation are buried in the prospectus for the bank's imminent 12 billion pound rights issue, which is to be put to a vote at a shareholder meeting this week. A spokesman for RBS declined to comment on the matter beyond what has been said in the prospectus.

FRIENDS PONDERS SHARE SPLIT

Friends Provident (FP.L) is considering a share split to dispose of 52 percent in asset management business F&C (FCAM.L). The life assurer has been scouting out interest in the stake as part of a disposal programme. A number of potential bidders, including Aberdeen Asset Management and Blackstone, have explored a possible offer but it is understood Friends has yet to receive any offers that match its expectations.

The Sunday Telegraph

SOARING COCOA PRICE FORCES CADBURY REVIEW

Cadbury's (CBRY.L) board is to discuss the impact of rising commodity costs this week as it deliberates over potential price rises for its chocolate bars. The price of cocoa has risen by nearly 28 percent over the last year and rises in other raw material prices, such as sugar and milk, have also added to the cost of production. Cadbury warned earlier this year it may increase prices to mitigate higher commodity costs. In April, the company's confectionary business reported a seven percent increase in first-quarter sales, the biggest jump for a decade, with UK sales seeing a rise of three percent.

CHLORIDE ATTRACTS A MYSTERY SUITOR

Sources say that Chloride (CHLD.L), which helps companies such as Barclays, BP and J Sainsbury protect their electrical equipment from power failures, has recently received an undisclosed bid approach. It is not clear which company has approached Chloride but analysts say that the most likely bidders are Eaton Corporation and Emerson Electric. Chloride is currently valued at 536 million pounds and over the past decade has grown rapidly, with several acquisitions including AST in France, Ascor Power in Singapore and Masterpower in Aberdeen.

The Observer

ANGER AT SHELL'S GOLDEN HANDCUFFS

Royal Dutch Shell (RDSa.L) is facing a showdown with investors over its plans to pay three million pounds to directors so they stay with the oil giant for three years. Shell is giving shares equivalent to their annual salary to finance director Peter Voser, exploration and production director Malcolm Brinded and gas and power director Linda Cook. One investor said the payments were pointless: "I have not seen a business it works in. The executives still leave." Corporate governance monitor PIRC is also recommending that its members vote against the remuneration report.

SAINSBURY'S CHIEF COULD SCOOP NINE MILLION POUNDS