PRESS DIGEST – Financial Times – Jan 29

Financial Times

ARRIVA IN TIE-UP TALKS WITH SNCF

Arriva (ARI.L: ), the bus and train operator, is in early
negotiations about a potential tie-up with SNCF, France’s
state-owned rail company. The tie-up would create one of the
biggest public transport companies in the world. SNCF is seeking
to inject part or all of the Keolis public transport group, in
which it is the controlling shareholder, into Arriva in return
for an equity stake. The move, which comes as many of Europe’s
public transport operators seek partnerships or mergers to build
scale in a rapidly expanding market, could create a group with
annual sales of 5.6 billion pounds.

WARBURG PINCUS ACQUIRES SURVITEC

U.S. private equity group Warburg Pincus [WP.UL] has
acquired Survitec, the maker of survival, safety and defence
equipment, for 280 million pounds. The acquisition signals the
latest indication of recovery in the buy-out market, following a
two-year hiatus. Warburg Pincus is financing less than half the
price of Survitec with debt, as part of the U.S. group’s plan to
leave room for it to expand through acquisitions in North
America and Asia. This comes in stark contrast to the credit
bubble when deals were usually at least 80 percent debt.

SIR DAVID JONES TO STEP DOWN FROM JJB CHAIR

City veteran Sir David Jones is stepping down as chairman of
JJB (JJB.L: ), the sports retailer, because of ongoing health
concerns. Jones had helped JJB get back on its feet after a
turbulent year. The group had previously hoped he would remain
in the role until the arrival of new chief executive Keith
Jones. Like-for-like sales at JJB in the 52 weeks to January 24
fell 28 percent on the previous year. Total sales were down 51
percent, following intense competition from Sports Direct
(SPD.L: ) and JD Sports Fashion (JD.L: ). JJB’s shares fell one
penny to reach 20.5 pence.

HOPES RISE FOR XCITE ENERGY

Shares in Xcite Energy (XELL.L: ), owner of the Bentley heavy
oil field, which is one of the biggest undeveloped fields of the
UK continental shelf, soared 8.7 percent to 50 pence on
Thursday. The rise came as the group announced a supply and
financing agreement with oil firm BP (BP.L: ) for its flagship
asset. Dougie Youngson, of Arbuthnot Securities, said the deal
“de-risks the development phase of the project” and improves its
economics.

TRUST CLAIMS CO2 FOOTPRINT A THIRD BIGGER

According to the Carbon Trust, UK consumers are responsible
for generating much higher quantities of carbon dioxide than
most realise. The government-backed organisation, which helps
businesses cut emissions, says UK consumers’ true “carbon
footprint” is likely to be a third bigger than they realise.
This is because of a reliance on imported consumer goods, and
the Carbon Trust has called for greater awareness on the
emissions created by importing goods from countries such as
China. One controversial way the body has suggested for
accounting for this hidden environmental cost would be to impose
carbon taxes on imports.

FSA EXTENDS SCRUTINY OF EXECUTIVES

As part of plans to tighten governance in the banking
sector, the Financial Services Authority will extend its
scrutiny of bank executives to those at overseas holding
companies with “significant influence” over banks and brokers in
Britain. The City watchdog is also looking at strongly
encouraging banks to appoint board-level risk officers and set
up board-level risk committees. The Financial Services Authority
is keen to crackdown on poor management of banks, following the
severe devastation caused by the financial crisis.

SHOP DIRECT TO CLOSE THREE CALL CENTRES

Littlewoods-owner Shop Direct has revealed plans to close
three of the home shopping retailer’s call centres, putting up
to 1,500 jobs at risk. The retailer, which is owned by Sir
Frederick and Sir David Barclay, reported sales of 1.7 billion
pounds in the last financial year. However, the group said the
migration of its customers to the Internet had resulted in
falling call volumes and excess capacity in its call centres.
The announcement reflects a shift in consumers’ shopping habits
as they become more Web-savvy.

MAXIMUM CROSSRAIL LEVY TO HIT COMPANIES

London mayor Boris Johnson will announce plans on Friday for
the capital’s businesses to pay the maximum extra levy to fund
Crossrail for the next quarter of a century. Johnson’s plan to
impose the two pence in the pound business rate supplement from
April comes in spite of warnings that the tax could damage
companies’ chances of recovering from recession. The levy is
being introduced to finance 4.1 billion pounds of the Greater
London Authority’s contribution to the 16 billion pound
Crossrail scheme.

“FORTRESS” PLAN FOR HEATHROW LAND

Greenpeace invited architects on Thursday to design an
“impenetrable fortress” to block land earmarked for Heathrow
airport’s third runway. The environmental charity plans to
construct the winning design as soon as possible to disrupt the
London airport’s seven billion pound scheme. In an effort to
create legal obstacles to delay or stop the third runway,
Greenpeace last year bought an acre of land at the site and gave
ownership to more than 60,000 people.

CHANGES ORDERED TO BATTERSEA PLAN

The redevelopment of Battersea Power Station has failed to
meet London mayor Boris Johnson’s planning strategy. Although
Johnson was generally supportive of the plans by Irish developer
Real Estate Opportunities (REO.L: ) for the power station and the
land next to the Thames, he said approval would be subject to
further work. The end result will transform the former power
station to provide homes, shops, offices and conference
facilities.

Penny Stocks

Prepared for Reuters by Durrants

PRESS DIGEST – Financial Times – Jan 29