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PRESS DIGEST - British business press - Aug 24
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LONDON, Aug 24 (Reuters) - The Mail on Sunday
TAYLOR WIMPEY . TRIPLE WHAMMY
Taylor Wimpey , the housing giant, is expected to write down the value of its UK land by 550 million pounds and cancel its interim dividend this week as the credit crunch continues to batter the housing industry. In a further blow to confidence, the company's pension liabilities could be set to almost double following a planned review of the pension scheme, a source close to the company said. Taylor Wimpey will announce half-year results that will reveal a sharp drop in profits from last year's 140.9 million pounds.
DEBENHAMS CHIEFS HOLD THEIR PAY
Bosses at Debenhams have agreed to freeze their pay for the next 12 months as tough conditions on the high street continue to squeeze the retailer. Chief executive Rob Templeman, finance director Chris Woodhouse and other senior managers will receive no pay rises for a year. About 1,000 head office staff - due a pay review next month - will have rises deferred until at least after the Christmas period. However, 20,000 store staff have been promised pay deals in line with inflation.
OCADO LAUNCHES CLUB
The upmarket online grocer Ocado has introduced a new membership scheme that it claims will cut the cost of home deliveries. Membership of Ocado on Demand costs 40 pounds for three months, 60 pounds for six months and 105 pounds for a year, in exchange for which customers get 'free' delivery. Co-founder Jason Gissing said: 'If you are spending five pounds a week on delivery fees for 12 weeks, a season ticket for 40 pounds provides a saving.' The scheme will generate up-front cash for the loss-making business but Gissing said that was not the reason behind its launch.
The Sunday Times
WALKER PUSHES FOR WOOLIES BID TALKS
Malcolm Walker, the founder of the Iceland food chain, would considerably narrow the Woolworths product range and slash overheads should he succeed in acquiring the troubled high-street retailer. Analysts expect him to take the same 'back to basics' approach he took to Iceland, which he reinvigorated when returning to run it in 2005 after a four-year hiatus marked by poor results. Walker heads a consortium including Baugur, Iceland's owner. Their initial proposal to acquire Woolworths was rebuffed last week.
ROTHSCHILD CALLED IN TO SAVE FOXTONS
BC Partners, the private equity group that bought Foxtons for 390 million pounds in 2007, has called in NM Rothschild to review the business. This is likely to include a restructuring of the highly leveraged deal, which left the estate agent with annual debt interest payments of 26 million pounds. On top of this, the group has banking covenants in place - quarterly targets to hit measuring turnover in relation to debt - which are increasingly under pressure. With housing sales at a virtual standstill, the banks are said to be watching the situation very carefully.
PENDRAGON IN THE BLACK BUT CUTS DIVI
Pendragon , the UK's largest car dealer, will announce this week that the shareholders' dividend will be slashed to reflect the tougher economic conditions the group is facing. Trevor Finn, the chief executive, will reveal when announcing full-year results that pre-tax profit has slumped after a sharp fall in sales. However, even after bearing the brunt of 500 redundancies across the group, Pendragon is still generating cash and is in profit, helped by a 15 million pound VAT rebate.
The Sunday Telegraph
CHINESE BUY STAKE IN PRU
China's central bank, the People's Bank of China, has bought a secret stake in Prudential as part of Beijing's plans to deploy its massive foreign currency reserves in overseas markets. The shareholding of about one percent places the bank among the British insurer's top 25 institutional investors. Analysts believe investments of this type will become increasingly common as Asian companies and governments grow in influence in the global economy. 'It is not just the insurance sector. The Chinese have been buying stakes in a significant number of UK companies,' said a well-placed source.
FTSE BOSSES' PAY 'BEARS NO RELATION TO PERFORMANCE'
New research by Patterson Associates, the corporate remuneration specialist, suggests that pay awards for FTSE 100 bosses bear little relation to performance, failing to guarantee good shareholder returns. The study threatens to reignite the row over fat-cat pay in a year when investors have seen the share index collapse by 21 percent. The median total pay for a FTSE 100 boss over the past year was 8.9 million pounds, up ten percent. Simon Patterson, founder of the pay specialist, said: 'Success is rewarded, failure is compensated.'
WPP SELLS MUGABE AGENCY
Advertising giant WPP has quietly offloaded its shareholding in Imago Young & Rubicam, a Zimbabwean agency involved in the re-election campaign of Robert Mugabe. WPP sold its 25 percent stake last month for just one dollar to Sharon Mugabe, the chief executive and majority shareholder, who WPP was assured is no relation to the president. Young & Rubicam is one of the most powerful agencies in WPP's global empire - as part of the deal, the Zimbabwean agency will be changing its name to remove all reference to Y&R.
The Independent on Sunday
BAA BLASTS COMMISSION REPORT AS 'RIDICULOUS'
Sir Nigel Ruddd, the chairman of BAA, has accused the Competition Commission of punishing the airports operator for the UK's congestion problems in a scathing attack on the watchdog. Rudd said the Commission's review, which recommended last week that BAA sell three of its airports, was 'ill-thought out, inconsistent and could put back investment and expansion at Britain's airports and infrastructure by years.' He added: 'We need new runways to ease congestion, not different airport operators'.
BARCLAYS LOOKS TO CLEAN UP WITH 300 MILLION POUNDS SWARFEGA SALE
Barclays Private Equity has put Deb, the firm behind Swarfega industrial hand soap, up for sale with a price tag of 300 million pounds. A mixture of trade buyers and private equity are likely to be interested in the acquisition, according to an industry source. He added: 'This is a high-quality business that will attract private equity businesses such as Bridgepoint, Cognetas, Hg Capital and Montagu.' An information memorandum is currently being prepared.
LOCKHEED MARTIN'S UK HEAD TO STEP DOWN
The chief executive of the UK division of Lockheed Martin is stepping down from the role after more than a decade in the cockpit. According to a source close to the company, Ian Stopps, who has headed the US aerospace giant's UK operation since July 1999, is looking to retire 'at Christmas or very early next year'. Lockheed's clients in the UK include Royal Mail and London Underground. A company spokesman said: 'No announcements have been made about Mr Stopps's retirement from the company and no dates have been set.'
The Observer
TESCO MUSIC ACQUISITION PUTS SQUEEZE ON SPECIALIST CHAINS
Tesco has acquired a 'substantial portion' of the UK assets of Handelman, the US supplier of CDs, DVDs and games, in a move that will ramp up the price war with specialists Zavvi and HMV . The specialists have been forced to cut prices as supermarkets have encroached into the entertainment sector, lowering the prices of CDs in store. 'On selected products, Tesco is happy to use CDs as loss leaders to get people into the store,' said one analyst.
HEDGE FUNDS CIRCLE SCOTTISH & SOUTHERN
Hedge funds are buying up stakes in 12 billion pound Scottish & Southern Energy in anticipation of the company being a bid target. The latest fund to buy stock is Centaurus, headed by Frenchman Bernard Oppetit, which has joined other funds such as GLG, Lansdowne and Odey Asset Management. Eon of Germany and Vattel of Sweden are rumoured to be circling SSE and one or another may bid before the end of the year. It is one of the few British energy suppliers not to have been acquired by foreign predators in the past decade.
FURTHER BAD NEWS FOR B&B SHAREHOLDERS
Bradford & Bingley is expected to deliver more bad news to its 800,000 private shareholders this week by withholding an interim dividend and warning that the final payout is likely to be slashed. The bank has not commented on its dividend but just days after raising 400 million pounds from shareholders to shore up its balance sheet it would be strange if it paid out, analysts say. Shares in B&B have plunged to 53.5 pence from 430 pence a year ago.
Prepared for Reuters by Durrants
Keywords: PRESS DIGEST British business =3
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