PRESS DIGEST – British business – Jan 26

The Guardian

SHOWDOWN LOOMS AS M&B BOARD REJECTS INVESTORS’ PEACE
OFFERING

Pub group Mitchells & Butlers (MAB.L: ), currently in dispute
with its largest shareholder, currency trader Joe Lewis, has
dismissed 11th-hour concessions offered by Lewis ahead of a
critical shareholder vote on Thursday. M&B chairman Simon Laffin
expects to be ejected from the company, having led a boardroom
purge last month. A statement from M&B said the overriding aim
of the board was to ensure that all shareholders were treated
fairly “and that no individual shareholder, or bloc of
shareholders, has excessive influence over the board composition
or decisions”.

“PAYWALLS” WILL SLEEPWALK INDUSTRY INTO OBLIVION –
RUSBRIDGER

Guardian editor-in-chief Alan Rusbridger has said Rupert
Murdoch’s campaign to introduce so-called paywalls to newspaper
websites could lead the industry into a “sleepwalk into
oblivion”. Rusbridger told a London audience of academics and
journalists that universal charging for newspaper content on the
Internet would remove the industry from a digital revolution. He
said his commercial colleagues believed that a paywall would
earn a fraction of what the Guardian was already earning in
digital revenues.

The Times

BROWN SAYS THE WORLD IS COMING ROUND TO BANK INSURANCE TAX

Prime Minister Gordon Brown believes that proposals for an
insurance tax on banks are finding growing international
support. Brown said that the idea was “gaining currency around
the world” following U.S. moves for a levy on wholesale lending.
The global transactions tax was discussed during talks at
Downing Street between officials from G7 finance ministries, the
International Monetary Fund and the World Bank. City Minister
Lord Myners, who hosted the talks, said the establishment of an
insurance fund would be the biggest legacy of the state bailout
during the credit crisis.

TEMPUS

Aegis (AEGS.L: ) (Buy)

Hiscox (HSX.L: ) (Buy)

Hornby (HRN.L: ) (Hold)

The Independent

FERRERO EXIT LEAVES KRAFT AS ONLY BIDDER FOR CADBURY

On Monday, Italian chocolatier Ferrero formally ruled itself
out of the bidding in the takeover battle for the UK-based
confectioner Cadbury (CBRY.L: ), leaving an 11.9 billion pound
offer from U.S. food group Kraft (KFT.N: ) uncontested. The news
of Ferrero’s withdrawal came on the day that a Takeover Panel
deadline for competing offers expired. Kraft now has until
February 2 to convince Cadbury shareholders to accept its cash
and share offer, which will be financed through a 9.5 billion
pound bond issue and the issuing of new shares.

CALL FOR NEW CURB ON COUNCIL FINANCE ADVISERS

A report to be published today by the Communities and Local
Government Select Committee will call for the Financial Services
Authority to be given new powers to regulate companies that
advise public sector bodies and other organisations such as
charities regarding the management of their cash reserves and
investments. The report was commissioned following the collapse
of the Icelandic bank Icesave, from which it emerged that around
a billion pounds of tax-payer’s money had been placed at risk
through investments with the bank.

INVESTMENT COLUMN

Aveva (AVV.L: ) (Hold)

Hiscox (HSX.L: ) (Take Profits)

Hornby (HRN.L: ) (Hold)

Daily Telegraph

PARTYGAMING FOUNDER SEVERS TIES WITH GAMBLING COMPANY

One of the founders of the online gambling business
PartyGaming (PRTY.L: ) has hired the investment bank Goldman Sachs
to sell his 38.8 million shares in the company, which are worth
114 million pounds. Anurag Dikshit’s decision to sell his
remaining stake follows concerns about the consequences of the
company’s operations being deemed illegal in the United States.
PartyGaming said last week it was holding talks regarding
consolidation in the gaming sector, with Bwin thought to be the
most likely candidate for a possible tie-up.

LESS VENTURE CAPITAL “HAS BENEFITS”

A prominent venture capitalist has said that a reduction in
the number of venture capital firms in the UK would be
beneficial for the industry. Fred Destin, a partner at Atlas
Ventures, said that while individual venture capital firms had
made money from investing in small companies, little progress
had been made in the sector as a whole over the past decade.
Destin foresees it as inevitable that the industry is
over-capitalised and will have to shrink, accommodating fewer
but better participants.

CBI CHIEF WARNS OF TWO-YEAR DELAY IN RECOVERY

Richard Lambert, director-general of lobbying group the
Confederation of British Industry, has said it could take two
years for the UK to fully recover from the recession. He said
Britain was now ten percent poorer than it would have been had
there not been a recession and that growth was most likely to
come from private sector investment and trade. The CBI estimated
that an annual 3 percent increase in GDP would foster the
creation of 300,000 more jobs than if the economy grew by two
percent.

EUROPE IN 350 BILLION POUND REFINANCING HEADACHE

Large European businesses will be forced to tackle a 400
million euro refinancing crisis this year as borrowings mature
while lenders remain unwilling to lend, according to a new
study. Of the G4 European countries, Britain has the highest
amount of corporate debt maturing this year, at 135.6 billion
euros. Businesses are likely to use bond issues to supplement
cash flows, but too many of these could paralyse the debt
markets.

NEW FINANCE BOSS TO FIX THE PIPES AT WOLSELEY

John Martin, formerly of private equity firm Alchemy
Partners, has been appointed the new finance director of
builders’ merchant Wolseley (WOS.L: ). Its chief executive Ian
Meakins said the move was a signal that Wolseley was planning to
focus on organic growth and move away from acquisitions. The
news prompted a 15 pence increase in Wolseley’s share price.
Last year, Wolseley successfully raised one billion pounds in
funds to reduce some of its debt and has recently been selling
off its unprofitable businesses abroad to help it weather the
tough economic conditions.

QUESTOR

FirstGroup (FGP.L: ) (Buy)

Templeton Emerging Markets (TEM.L: ) (Buy)

Stocks

Prepared for Reuters by Durrants

PRESS DIGEST – British business – Jan 26