PRESS DIGEST - British business press - Feb 2

The Times

SCOTTISHPOWER FALLS INTO LINE WITH PRICE INCREASE

ScottishPower has become the latest British power supplier to announce price increases. The company increased with immediate effect, electricity prices by an average of 14 percent and gas prices by 15 percent. ScottishPower, which is owned by the Spanish utility Iberdrola (IBE.MC), blamed the price increases on rising wholesale prices of coal and gas, saying that its input costs are now at record levels, having increased by up to 97 percent since February 2007.

RUMOUR OF THE DAY

There is talk that International Consolidated Minerals ICMI.L, which is drilling a defunct copper and silver mine in Peru, has found ore far in excess of official estimates, making it likely that the company will attract bidders as reserves are proved. FD Capital began covering the stock on Friday with a price target of 747 pence.

TIDDLER TO WATCH

Shares in African Eagle (AFE.L) gained 0.25 pence to 9 pence after the mineral resource company with interests in East and Central Africa completed a pre-feasibility study which showed the economic viability of its copper project in Mkushi, Zambia. It is expected that a definitive study should be ready by the end of this year. Seymour Pierce reiterated its 'buy' advice on the stock.

The Daily Telegraph

MANAGING DIRECTOR REPLACED AS BP SHAKE-UP GOES ON

Tony Hayward, chief executive of BP (BP.L), has continued his series of top-level management changes in the company, with the replacement of David Allen, a close associate of former BP boss Lord Browne of Madingley, as managing director and chief of staff. Allen is being replaced by Steve Westwell, former vice-president of BP Alternative Energy. Hayward has appointed at least 23 new senior managers in the past two months.

GPG RAISES STAKE IN BID FOR NEWBURY

Guinness Peat Group (GPG.L), which is mounting an 11.50 pounds-per-share hostile bid for Newbury Racecourse (NYR.PZ), has upped its stake in the Berkshire operator to 26.2 percent. GPG, which has until Tuesday to win more than 50 percent acceptances for its bid, warned that it would attempt to change the board of Newbury should its 35 million pound offer be rejected. Newbury however hit back, saying that GPG's final offer still significantly undervalued the company.

SAUSAGE MAKER SKINNED

Shares in Cranswick (CWK.L) tumbled 19 percent to 620 pence after the upmarket sausage manufacturer warned that rising beef and pork prices would hit profits. Clive Black, an analyst at Shore Capital cut his full-year pre-tax profit forecast from 35.9 million pounds to 33.5 million, saying that though the company's management is among the best in the market, every happy story has its moments of disappointment and distress.

The Guardian

BA TO LAUNCH BUSINESS-ONLY US FLIGHTS

British Airways BAY.L unveiled plans on Friday for an all-business class airline between London and New York next year, with two daily flights between London City airport and JFK. Each flight will carry a maximum of 32 passengers. British Airways' Chief Executive Willie Walsh said the service was also expected to win bookings from leisure customers. BA's shares fell 4.2 percent to 318 pence.

MAIL WRITES OFF 16.5 MILLION POUNDS IN 18 MONTHS WITH SIMPLYSWITCH

The Daily Mail Group (DMGOa.L) said it would close on Feb. 20 its SimplySwitch price comparison Web site, which it bought for 22 million pounds 18 months ago. The move to close SimplySwitch is seen as an admission that the Web site is not making sufficient profit, leaving rivals, including the market leader, uSwitch, looking vulnerable. Last week the Financial Services Authority delivered a blow to the price comparison Web site industry when it announced it was investigating the market following accusations that the sites mislead consumers.

BT RAISES COST OF WEEKDAY CALLS BY UP TO 1,900 PERCENT

BT (BT.L) will from April 1 hike the cost of making daytime calls from a BT landline by 23 percent to 10 pence for the first minute, and 4 pence for every subsequent minute -- up from 3.25 pence. It will also, from the same date, raise the monthly landline rent from 11 pounds to 11.75 pounds. It will equally make evening and weekday calls more expensive. BT however moved to offset the higher charges by introducing, with immediate effect, free weekend calls for those on its Option One package and also lowered the cost of its all-the-calls-you-can-make deals.

The Independent

CHINALCO AND ALCOA GATECRASH BHP'S 65 BILLION POUND BID FOR RIO

Chinalco, China's state-owned aluminium company, used a bid vehicle called Shining Prospect, in which the American company Alcoa (AA.N) is a minor partner, to pay 7 billion pounds for 12 percent of Rio Tinto's (RIO.L) London-listed shares on Friday. Xiao Yaqing, Chinalco's president, denied that the share raid was aimed at blocking BHP Billiton's(BLT.L) 65 billion pound takeover of Rio, insisting that it was simply a "coincidence in timing" that his company's share purchase was made close to the 'put up or shut up' deadline given to BHP. It is thought that the Australian government will be likely to oppose a Chinese takeover of Rio.

SMOKING BAN AND SLOWDOWN HIT BREWERS

The smoking ban and a slowdown in consumer spending were on Friday blamed by brewers Greene King (GNK.L) and Fuller, Smith & Turner (FSTA.L) for the weak trading in their pubs. Greene King, which makes Old Speckled Hen ale, reported a 0.1 percent fall in revenue at its managed estate in the first 38 weeks of the year. Fuller, Smith & Turner reported like-for-like sales rose 4 percent in the 43 weeks to Jan. 26, but down from the 5.3 percent gain in the first half.

L&G TO MOVE PEOPLE BACK INTO STATE PLAN

Legal & General (LGEN.L) is to automatically move thousands of savers over the age of 44 who have opted out of the State Second Pension (S2P) back into the scheme -- unless they instruct the company not to do so. L&G is making the move because it believes those affected will be otherwise worse off.

Prepared for Reuters by Durrants.