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Sunday newspaper round-up: BAA, Johnston Press, British Energy

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Date: Sunday 24 Aug 2008

LONDON (ShareCast) - The Competition Commission is considering appointing a special trustee to auction three BAA airports, a move that would take control of the sell-off out of the airport group’s hands.

BAA might also lose management control of the airports. The commission is weighing up whether the trustee should take over the day-to-day running of the airports, or whether it or BAA should appoint what it calls “hold-separate” management, the Sunday Times says.

Johnston Press will this week will be stung by a £100m-plus impairment charge and is expected to scrap its interim dividend as it closes in on selecting a new chief executive. The Scotsman and Yorkshire Post publisher will write off more than 20% of the value of four acquisitions made in 2005 after a review found that future cash flows would be less than expected, according to the Sunday Times.

The biggest institutional shareholder in British Energy is demanding a merger between the nuclear power generator and Centrica, the owner of British Gas, as the "obvious solution" to the future of both companies. Invesco, which owns a 15 per cent stake in British Energy, worth about £1.5bn, as well as 5 per cent of Centrica, has presented to both companies' boards its views on the deal, which include a place for EDF, the utility giant majority-owned by the French government, the Sunday Telegraph reports.

Britain’s biggest car dealership, Pendragon, which said eight weeks ago that it was difficult to forecast year-end profits after a sharp fall in sales, will announce this week it will slash its dividend. Trevor Finn, the group’s chief executive, is to scale down the payout to reflect the tougher economic conditions Pendragon is facing. But it is understood he will not scrap it, the Sunday Times says.

China’s central bank has secretly amassed a stake in Prudential, the Britain’s second-biggest insurer. The People’s Bank of China is thought to have acquired about 1% of the shares in the Pru — worth about £134m — putting it among the company’s top 25 investors, the Sunday Times reports.

An investment firm advised by John Tiner, the former head of the City regulator, has approached Collins Stewart about a potential takeover of the broking firm chaired by Terry Smith. Corsair Capital, a US private equity group, is the latest party to express an interest in Collins Stewart following this month's disclosure that it was in takeover talks, the Sunday Telegraph says.

The Sunday Telegraph says it has learned that Sir John Parker, one of Britain's most senior industrialists, is being lined up to take the helm of Anglo American, the FTSE 100 mining group. Parker, whose portfolio of jobs includes the chairmanship of National Grid and seats on the boards of the Court of the Bank of England and Carnival, the cruise line operator, is among a group of candidates being considered by Anglo American's board to replace Sir Mark Moody-Stuart, who is due to retire as its chairman next year, the paper says.

Iceland's chief executive, Malcolm Walker, is expected to meet Woolworths chairman, Richard North, this week to discuss a new takeover bid for the high street retailer. After rejecting Iceland's earlier approach, the Woolworths chairman has now agreed to meet Mr Walker, the Independent on Sunday says.

The IoS also reports that TPG Capital, the buyout group that abandoned its attempts to rescue Bradford & Bingley earlier in the year, has pulled out of the race to buy Paragon, the ailing buy-to-let mortgage lender. Sources close to the Texan private equity group have confirmed to The Independent on Sunday that it is no longer interested in pursuing the Solihull-headquartered firm, leaving the private equity houses Blackstone and Apollo, which owns the Countrywide estate agent chain, to fight it out for Paragon.

The Bank of England will move only slowly to cut interest rates, in spite of new official figures showing that Britain’s economy has ground to a halt, the Sunday Times says.

WPP, the world's second largest advertising company, has quietly offloaded its interest in a Zimbabwean agency involved in President Robert Mugabe's re-election campaign. The 25 per cent stake in Imago Young & Rubicam was sold by WPP last month for just $1 to the majority shareholder, Sharon Mugabe, who is also chief executive, the Sunday Telegraph reports.

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