PRESS DIGEST – British business – Jan 31

Independent on Sunday

SOLARCENTURY CONSIDERS LISTING

According to a source close to Solarcentury, the renewable
energy company is considering a flotation on the London Stock
Exchange. A listing of the company founded by green campaigner
Jeremy Leggett could value the solar technology provider at up
to 100 million pounds, according to an estimate from an industry
expert. The company currently has a turnover of 35 million
pounds and is believed to be considering the flotation for later
this year to take advantage of “feed-in tariffs” due to be
detailed in a government announcement next week that will allow
consumers to sell surplus energy to the national grid.

SERCO HOPES TO WIN CYPRUS BID

The FTSE-100 services group Serco (SRP.L: ) is believed to be
the front-runner to win a 200 million pound contract from the
Defence Ministry to provide support services to British
servicemen in Cyprus. The award of the contract, dubbed Project
Wavell, is due to be announced on February 19 afterg a
three-year bidding process. Lanmarc, a joint venture between
UK-based Interserve (IRV.L: ) and American firm CSC, and the
FTSE-250 company VT (VTG.L: ) has also submitted tenders for the
contract.

TOPLAND TO SHOP FOR CHEAP PROPERTIES

Real estate investor Topland Group has set aside an
estimated 200 million pounds to buy properties that owners are
desperate to sell. The London-based group has been purchasing
distressed commercial property loans at a significant discount
for the past 18 months. Topland’s director of structured finance
Tom Betts said: “We’re ready to provide equity as well as asset
management services.” The group’s current investments include
department stores let to retailers and five office blocks in the
City of London.

INDIAN MINER TO LIST UP TO SIX SPIN-OFF FIRMS

Vedanta Resources (VED.L: ), the predominantly Indian-based
mining group, is considering plans to spin off several of its
interests, resulting in five or six companies plus a parent
organisation. Vedanta would retain a controlling interest in the
subsidiaries but each would be listed separately. A number of
leading mining bankers in London have been asked to examine
proposals for the listings. Some potential advisers believe that
most of the listings will end up on the Hong Kong and Indian
stock exchanges, as the spin-offs could not place on the London
Stock Exchange due to the parent company being a FTSE 100
company.

The Observer

NEW ITV BOSS FACES BREAK-UP BID BY REBEL INVESTORS

A group of shareholders in British broadcaster ITV (ITV.L: )
are attempting to pressure the company into splitting off the
production arm from the broadcasting operations in order to
increase the value of the company. They have presented their
proposals to recently appointed chairman Archie Norman and are
attempting to secure a meeting with new chief executive Adam
Crozier as soon as possible. ITV Productions has seen its share
of network output decline over the past five years, as some of
ITV’s most blockbusting programmes are made by independent
companies. Norman and Crozier are expected to resist the split.

Mail on Sunday

INGENIOUS INVESTORS HIT BY BIG TAX BILLS

Investors in media investment group Ingenious Media (IMAC.L: )
have received tax demands for tens of thousands of pounds. The
bills relate to tax relief claimed on investments for the year
2003/04 and it is thought that partners on Ingenious’ Inside
Track investment fund could be affected. It is understood
letters from HM Revenue and Customs say the partners were not
entitled to offset their share of the fund’s trading losses
against other income as the partnership was not trading on a
commercial basis. Ingenious is expected to dispute HMRC’s
assertion.

HUNTRESS HANDS OVER SHARES TO REDUCE DEBT

White-collar recruiter Huntress Group has struck a deal with
Barclays Ventures that will see the private equity firm become
Huntress’ major shareholder in return for writing off 28 million
pounds of Huntress’ 40 million pound debt. The deal will also
see Gary Laurence, who led a 2007 management buyout of the
recruiter from Graphite Capital, step down as chief executive.
Revenue and profits at Huntress fell last year as FTSE 100 firms
cut back on recruiting, and the board began restructuring talks
with Barclays in December.

Sunday Times

PREMIER’S CHAIRMAN IS EXPECTED TO STEP DOWN

Premier Foods (PFD.L: ) chairman David Kappler is expected to
stand down at the group’s annual meeting this year. An
announcement is expected as early as next week, with headhunters
to be appointed to search for a replacement. Premier, which owns
the Hovis and Mr Kipling brands, has seen 14 percent wiped off
its market value in the past two weeks after a trading update
warned that profits would be at the bottom end of analysts’
forecasts. Sources close to Premier said Kapler’s departure was
voluntary and did not come as a result of shareholder pressure

1.7 BILLION POUND BID FOR WATER GROUP

Canadian pension fund the Ontario Teachers’ Pension Plan is
preparing to launch a 1.7 billion pound bid for British water
group Northumbrian Water (NWG.L: ). The fund owns 27 percent of
the utility company but has been seeking an opportunity to make
a full takeover for some time. It is choosing to make its move
after UK water industry regulator Ofwat set out pricing and
spending limits for water companies which affect Nothumbrian’s
competitors. The bid is unlikely to include a large premium as
the fund’s current holdings in the company decreases the
likelihood of competition.

LOVERING EYES DFS BID WITH PERMIRA

Retailer John Lovering has teamed up with European private
equity firm Permira to launch a buyout bid for UK furniture
group DFS. Lovering has recently been installed as chairman at
pub group Mitchells & Butlers (MAB.L: ) after the previous
chairman was ejected by shareholders. Lovering and Permira have
appointed Japanese bank Nomura to advise on the deal. The owner
of DFS, Lord Kirkham, is considering selling a majority stake in
his furniture retailer, valued in excess of 500 million pounds,
as he approaches retirement. Other parties expected to make bids
include private equity firms Cinven and Advent International.

SHAREWATCH

Anglo American (AAL.L: ) (If business slows, pressure on the
business to cut costs will return)

Sunday Telegraph

RBS UNVEILS AUCTION FOR WORLDPAY

A substantial number of businesses have expressed an
interest in acquiring Royal Bank of Scotland’s (RBS.L: ) payments
operation Global Merchant Services. A total of 45 different
parties have contacted RBS about the sale of GMS, which is
valued at two billion pounds and must be sold in order for the
partially state-owned bank to comply with European Commission
rules on state aid. Interested parties include the private
equity firms Silver Lake Partners, Kohlberg Kravis Roberts and
Advent International. The deadline for informing RBS of an
interest in GMS is Wednesday.

MORE GLAXO JOBS AT RISK IN INDUSTRY SHAKE-UP

British employees of the pharmaceutical company
GlaxoSmithKline (GSK.L: ) are anticipating thousands of job
losses. The company is believed to be pursuing further
cost-cutting measures that could add to the 1.7 billion pounds
of potential savings it has already identified. The main cuts
are likely to hit the business’ R&D operations the heaviest, as
GSK attempts to respond to increasing generic competition to
some of its most lucrative drugs.

PLAN TO SELL MATALAN MAY BE DERAILED

The planned sale of the discount fashion chain Matalan
[MTLAN.UL] looks unlikely to raise the sum in excess of 1.5
billion pounds originally hoped for by its owner John
Hargreaves. The American private equity firms TPG, Advent
International and possibly Warburg Pincus are expected to make
offers by Friday’s deadline, but all three are wary of paying
too much for Matalan. Hargreaves is believed to have inserted a
clause in the deal specifying a “break price” of between 1.2
billion pounds and 1.25 billion pounds, entitling him to refuse
to sell the business.

SABMILLER MULLS ARGENTINE BREWER DEAL

The UK-based brewer SABMiller (SAB.L: ) is thought to be
planning a takeover bid for the German-owned brewer Isenbeck,
which operates in South America. SAB may be hoping to revive its
strategy of aggressive expansion, which suffered a setback
earlier in January after Heineken beat it in a bidding war for
the Mexico’s Femsa Cerveza. The company already owns brewing
operations in Ecuador, El Salvador, Honduras, Panama and Peru,
which contribute 30 percent of its total revenues.

SUNDAY QUESTOR

ENRC (ENRC.L: ) (Buy)

Vodafone (VOD.L: ) (Buy)

Investing Tools

Prepared for Reuters by Durrants.

PRESS DIGEST – British business – Jan 31