PRESS DIGEST – British business – June 13

The Sunday Times

YELLOW PAGES GIVEN A GREEN HUE

Yell (YELL.L: ), the publisher of the Yellow Pages, will
reduce the size of the classified directory so it can fit
through letterboxes. The move will reduce Yell’s annual paper
consumption by 5,000 tonnes to 26,000 tonnes. Yell.com, the
group’s website, accounted for 29 percent of UK sales in 2009 as
the number of advertisers in the printed directory fell 14
percent to 335,000. BT (BT.L: ), the telecoms group, is planning a
similar move by reducing the size of the Phone Book by 15
percent, saving 2,000 tonnes of paper a year.

LISTING PLAN FOR “SON OF LLOYDS”

Lloyds Banking Group (LLOY.L: ) is working on proposals for a
stock market flotation of the chain of 600 branches it is being
forced to sell by the European Commission. The listing would
create a new British bank with five percent of the retail
banking sector. It would have an estimated market value in the
region of three to four billion pounds. The flotation is likely
to include incentives to attract members of the public to buy
shares, possibly at a substantial discount. Lloyds was given
four years to sell the business as part of a deal when it
received state funds, but hopes of a quick sale are fading.

TESCO CHAIRMAN STAYS ON TO SMOOTH LEAHY TRANSITION

David Reid, the chairman of supermarket Tesco (TSCO.L: ),
intends to remain in the post for at least another year and a
half to ensure the boardroom at Britain’s biggest retailer
remains stable, according to insiders. There was speculation
that Reid had been thinking of stepping down as a Tesco director
along with departing chief executive Sir Terry Leahy. However,
Reid is now tipped to stay as chairman for several months once
international director Philip Clarke takes Leahy’s place in
March 2011. Insiders said no decision had been made as to Reid’s
departure date.

SHOWDOWN OVER EASY BRAND ARRIVES IN COURT

Sir Stelios Haji-Ioannou is to attend the Royal Courts of
Justice this week to testify against EasyJet (EZJ.L: ), the budget
airline he founded and in which he is still the majority
shareholder. Haji-Ioannou says EasyJet is misusing the Easy
name. The dispute centres around the interpretation of a brand
agreement drawn up when EasyJet listed on the stock market in
2000. The agreement prevents Easyjet from making more than a
quarter of its revenue outside its “core activity”. The court
will rule on what constitutes this “core activity”, other than
selling seats on aircraft.

MILLION-POUND PAYOUT FOR THE OIL BARON WITH NO SALES

Todd Kozel, chief executive of oil explorer Gulf Keystone
(GKP.L: ), received a 1.9 million dollar bonus last year despite
concerns about the firm’s solvency. The company has yet to
generate any revenue from a discovery of up to 1.9 billion
barrels in the Kurdish region of northern Iraq. Under several
new incentive schemes for senior executives introduced last
year, Kozel was given 14.7 million shares and options payable
over coming years if targets are achieved. He was also awarded
three million options that can be exercised if the share price
reaches 93 pence. Kozel said the awards were justified.

The Sunday Telegraph

SUPERMARKET SALES HIT OVER ECONOMY FEARS

Both Tesco (TSCO.L: ) and J Sainsbury (SBRY.L: ) are thought
likely to confirm that sales across the supermarket sector have
slowed significantly when they release trading updates later
this week. Analysts’ forecasts suggest that Tesco, which
surprised the market last week with the announcement of chief
executive Terry Leahy’s departure, will report a growth in
like-for-like sales of between zero and 1.5 percent in its first
quarter. Some have even speculated that the retailer could
report a fall. Sainsbury’s, which reports on Wednesday, is
expected to say that like-for-like sales, excluding VAT, have
fallen between 0.3 and 0.5 percent. Just a year ago Tesco and
Sainsbury’s were seeing like-for-like sales growth of four
percent and 7.8 percent respectively.

VODAFONE SLAMS PLAN FOR LOWER CONNECTION CHARGES

Vodafone (VOD.L: ) has said that Ofcom plans to force mobile
operators to cut the price they charge to connect calls will
significantly increase the cost of owning a mobile phone. The
telecoms regulator wants operators to cut so-called mobile
termination rates from 4.3 pence to 0.5 pence-per-minute by
2014, something it estimates will save consumers 800 million
pounds a year from 2015. The four biggest operators, Vodafone,
O2, Orange and T-Mobile, collect hundreds of millions of pounds
a year from the charge. Vodafone UK chief executive Guy Laurence
said the move would hit low income households as operators would
likely move to recoup the lost revenue by increasing the price
of handsets or introducing monthly charges for pay-as-you-go
users who do not use their phones frequently enough.

CHAIRMAN’S 1.7 MILLION POUND LOSS ON BP SHARES

BP (BP.L: ) chairman Carl-Henric Svanberg has lost 1.7 million
pounds on BP shares bought before and after the oil spill in the
Gulf of Mexico. The former Ericsson head, who took on the BP
role at the start of this year, bought 4.3 million pounds worth
of shares at 575 pence in February, two months before the
disaster, and a further one million pounds worth eight days
after the spill, when the shares were trading at near 12-month
highs. The share price has since fallen to 396.9 pence and the
value of Svanberg’s investment has fallen by more than a third.

QUESTOR

Lookers (LOOK.L: ) (buy)

Royal Dutch Shell B (RDSb.L: ) (buy)

The Mail on Sunday

RBS BOSS PROMISES RENEWAL

The incoming head of retail banking at the Royal Bank of
Scotland (RBS.L: ) has launched a Customer Charter, pledging
minimum standards for customers, after accusing predecessors of
massive underinvestment to serve short-term shareholder value.
Brian Hartzer, head of retail banking, said the state-backed
bank suffered years of investment drought on systems and quality
of service, resulting in a deterioration in customer service
along with the “community’s regard for banks”. The charter, to
be audited every six months by Deloitte, includes a promise
never to shut down the last bank in town.

ASOS MAPS US ‘ONLINE HIGH STREET’

The chief executive of online fashion retailer Asos
(ASOS.L: ), Nick Robertson, plans to launch a series of websites
in the United States. The first phase of the company’s expansion
will occur in September when a dedicated U.S. site is launched,
but Robertson intends to target different regions of the
country, with websites catering for the east coast, the west
coast and the south. Orders will initially be shipped to the
United States from Britain. Robertson said that “Americans can’t
get enough of British fashion”. Asos wants to hit a global sales
target of one billion pounds in five years.

MIDAS

Hogg Robinson (HRG.L: ) (buy)

Lloyds Banking Group (LLOY.L: ) (buy)

The Independent on Sunday

BELEAGURED PRUDENTIAL CHIEF SNUBS GOLDMAN CONFRENCE

Prudential’s (PRU.L: ) chief executive, Tidjane Thiam, pulled
out of a Goldman Sachs financial institutions conference in
Madrid at the eleventh hour and with no explanation. Thiam, who
will face a shareholder’s decision next week over his future
following the collapse of the takeover of AIG’s Asian business,
was scheduled to speak at the conference along with Legal &
General’s boss Tim Breedon and Aviva’s chief executive Mark
Hodges. One attendee said: “His no-show reinforces the whiff of
arrogance that has hung around since this whole AIA debacle
began. Surely Pru could have got a replacement to attend. It
should be on the front foot.”

RESOLUTION-AXA TALKS CONTINUE THIS WEEK

Negotiations over the purchase of Axa’s (AXAF.PA: ) UK life
insurance business, between the French insurer and Clive
Cowdery’s Resolution group, are expected to continue on Monday.
Sources were keen to reject the notion that the 2.8 billion
pound sale is “a done deal”, insisting that further talks are
still to take place. If the purchase is successful, Resolution
will merge its Axa unit with its Friends Provident purchase
completed last year.

Investing Tools

Prepared for Reuters by Durrants

PRESS DIGEST – British business – June 13