M&A

23 November, 2009

PRESS DIGEST - British business - Nov 24

The Guardian

LLOYDS CUTS ANOTHER 800 JOBS AFTER LOSING EQUITABLE CONTRACT

Lloyds Banking Group(LLOY.L) will set the terms of its 22.5 billion pound rights issue which will require the taxpayer to buy 5.8 billion pounds of new shares. The bank will also announce the loss of a further 800 jobs at administrative centres, taking the total number of cuts since the start of the year to 15,000. The rights issue is expected to be priced at about 33 pence at a ratio of 1.5 new shares for each existing share. 570 job losses will be centred on Aylesbury in Buckinghamshire because the bank is moving roles. A further 340 jobs are under threat because Equitable Life, which uses the centre, is transferring to an Indian company, HCL.

NESTLE TALK ADDS TO CADBURY BID FRENZY

Talk of a bid battle sent Cadbury's(CBRY.L) shares up to their highest level since early September as Nestle(NESN.VX) resurfaced as a potential counter-bidder to Kraft (KFT.N). Other firms to have expressed an interest are Ferrero and Hershey (HSY.N). A union between Hershey and Cadbury would probably result in fewer job losses than a takeover by Kraft due to a strong cultural fit. According to Bloomberg, Nestle said it was looking at its options with a view to taking part in the break-up bid for Cadbury. Cadbury shares are now worth 43 percent more than in early September and closed up 13.5 pence at 814 pence.

NORTHUMBRIAN RULES OUT RIGHTS ISSUE AS PROFIT RISES

Northumbrian Water(NWG.L) said it will not proceed with a rights issue and reported pre-tax profits for the first half of 87 million pounds, up nearly 13 percent. The announcement concerning the rights issue comes ahead of a ruling on prices by the regulator. Northumbrian's finance director Chris Green said: "The need to raise rights issues.is certainly not on the agenda for us." The industry regulator is expected to rule on price cuts that could see water companies at risk of cutting dividends or raising cash to fund investment.

Prepared for Reuters by Durrants ($1=.6020 Pound)

Source: http://www.reuters.com