PRESS DIGEST – British business – Feb 3

ARM LINED UP FOR FTSE 100 INDUCTION

The Cambridge microchip designer ARM Holdings (ARM.L: ),
supplier to 98 per cent of the world’s mobile phones, looks set
to take Cadbury’s (CBRY.L: ) place in the FTSE 100. Shares have
doubled in price over the past year for the company which
designed the microchip for Apple’s iPhone. As the current 101st
largest company in Britain, ARM Holdings is expected to replace
Cadbury when it loses its blue-chip rating on Monday.

SPORTS DIRECT LINES UP ELITE LEGAL TEAM

Retailer Sports Direct (SPD.L: ) is securing one of the
country’s finest criminal QCs in order to advise the group’s
founder and executive deputy chairman in regard to a Serious
Fraud Office investigation. Shares fell by 17 per cent in
September when Mike Ashley’s group announced that it was being
investigated by the SFO and Office of Fair Trading into alleged
anti-competitive behaviour. It is understood that the Newcastle
chairman has hired the services of Keith Oliver, from fraud
specialist Peter & Peters, as well as proven defence barrister
John Kelsey Fry in the event of Ashley going to trial.

OWNERS PUT CARD FACTORY UP FOR SALE

The husband and wife team behind high street chain Card
Factory are putting their business up for sale and could get as
much as 400 million pounds. It is believed that Dean and Janet
Hoyle have appointed KPMG as their advisors with private equity
firms Advent International and TPG expected to be potential
buyers of the retailer’s 480 stores. The Card Factory joins a
long list of retailers that have been put up for sale and which
are looking to benefit from the attraction of a cash generative
business ideally poised for an upturn in the consumer economy.

QUESTOR

BP (BP.L: ) (buy)

Shanks (SKS.L: ) (sell)

The Independent

BA AND UNITE IN COURT OVER PLAN TO LIMIT CABIN CREW NUMBERS

Airline operator British Airways (BAY.L: ) is defending in the
High Court accusations made by the union Unite that it
unlawfully attempted to cut cabin crew numbers without
negotiations. The flag carrier is defending its decision,
declaring that it retains the right to change the number of crew
on its aircraft without notice. Unite states that British
Airways is in breach of contract by unilaterally imposing these
cuts. A strike by cabin crew during the Christmas period was
avoided after legal evidence that the industrial action was
unlawful. Unite is re-balloting its members and the result will
be announced on February 22.

INEOS SELLS FLUOR UNIT TO MEXICHEM

Ineos, the chemical supplier, has sold its fluorinated
chemicals unit, Ineos Fluor, to the Mexican conglomerate
Mexichem for 219 million pounds. Ineos is the world’s third
largest supplier of chemicals and its Fluor unit has a turnover
of 262 million pounds and employs 350 people in the UK, Japan,
China and the US. Ineos said the sale was an attempt to reduce
its debts and that the fluorochemicals unit was no longer a core
part of its business.

INVESTMENT COLUMN

Hampson (speculative buy)

Imperial Tobacco (IMT.L: ) (buy)

Babcock (BAB.L: ) (hold)

The Guardian

ORANGE/T-MOBILE DEAL THREATENED WITH INQUIRY

The Office of Fair Trading has called for the proposed
merger of mobile phone operators Orange and T-Mobile to be
scrutinised by the UK’s regulatory authorities amid fears the
deal will hamper competition and push up prices. However, the
OFT is not believed to be planning to call for an immediate
Competition Commission inquiry, but using the threat of one to
secure certain undertakings from the two networks. The deal
would give Orange and T-Mobile more than double the amount of
mobile phone spectrum owned by O2, the current market leader,
and more than five times the amount held by 3, the UK’s smallest
network.

TESCO OPENS ITS FIRST ZERO CARBON STORE

Supermarket group Tesco (TSCO.L: ) opened its first zero
carbon store in Ramsey, Cambridgeshire, as part of its plan to
be a carbon neutral company by 2050. The store is timber-framed,
uses skylights and sun pipes to reduce lighting costs and
employs a combined heat and power plant powered by renewable
biofuels. The refrigeration units have doors to save energy and
do not use HFC refrigerant gases. Chief executive Sir Terry
Leahy said the store cost 30 per cent more to build but its
energy use is reduced by 50 per cent.

JOHNSON PRESSES ADONIS FOR CUT IN TUBE LINES FEES

The Mayor of London, Boris Johnson, has asked Lord Adonis,
the transport secretary, to approach the owners of rail
contractors Tube Lines and urge them to forego their fees for
the next seven-and-a-half years. According to Johnson, Tube
Lines’ co-owners – Bechtel and Amey – are in line to receive an
estimated 400 million pound profit from these fees by 2017, and
as Transport for London is facing a 400 million pound funding
shortfall in payments to Tube Lines over this seven year period,
to target the management fees seemed an appropriate course of
action. An alternative plan would be for the government to
provide the funds via the taxpayer.

Stock Market Advice

Prepared for Reuters by Durrants

PRESS DIGEST – British business – Feb 3