/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/000517.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, May 17, 2000, Vol. 1, No. 8 Headlines * N E T H E R L A N D S * GROLSCH ENSCHEDE: Brewery Closed for Several Weeks After Blast * U N I T E D K I N G D O M * DIY CHAIN: Facing a ś285 Million Hostile Bid From FDIA GRANADA CONGLOMERATE: Faces Battles with Competition Regulators HYDER UTILITIES: Southern Co Prepares ś465 Mln. Bid for Troubled Co. MEPC PLC: BR Pension Fund to Buy Property Group's Assets for ś200m RANK: Indebted Leisure Group To Sell Stakes in Universal SOMERFIELD: Crisis is Intensifying, Lost More Than Qtr of Its Market TECHNICOLOR: Film Print Processing Business Up for Sale WHITBREAD: Poised to Sell Breweries for Up to ś400 Million ===================== N E T H E R L A N D S ===================== GROLSCH ENSCHEDE: Brewery Closed for Several Weeks After Blast ------------------------------------------- Grolsch's (GROL.AMS) Enschede brewery suffered substantial damage and will be closed for several weeks following Saturday's devastating explosion at a neighbouring fireworks depot, the company said on Sunday. Grolsch said its employees were not among the casualties but could give no more information about the extent of the damage. At least 20 people are thought to have died in the blast, with 562 injured and 59 of those still in regional hospitals. The brewery was set ablaze by the explosion, Reuters relates, prompting fears asbestos from its roof might be contaminating the area. Grolsch made no mention of asbestos in its statement. It said capacity at its second brewery, located in Groenlo, about 30 kilometres south of Enschede, would be used to its maximum. "In view of the fact that the company is sufficiently insured, the causes of the accident will have no major impact on the financial result of Grolsch NV," it said in the statement. ============================ U N I T E D K I N G D O M ============================ DIY CHAIN: Facing a ś285 Million Hostile Bid From FDIA ------------------------------------------------------ BILL GRIMSEY, the chief executive of Wickes, the DIY chain that is facing a ś285 million hostile bid from Focus Do-It-All, said last night that he was open to a higher offer for the business but would not sit by to see it snapped up "on the cheap". Mr Grimsey made plain, The Times relates, his willingness to sell Wickes, though at a higher price than Focus's current offer of 375p a share, soon after posting a trading statement to shareholders yesterday. Wickes shares closed at 407«p on Friday, down 3«p on the day. In the statement, Mr Grimsey confirmed a decision to buy back shares worth ś73.9 million. The buyback will give shareholders, who are to vote on the proposal later this month, the equivalent of ś1 a share. The move was designed to prove to Wickes investors that backing independence would be more lucrative than selling out to Focus. Mr Grimsey said that "it was about time Focus put up, or shut up" with its bid, suggesting that he would be open to a higher offer. "There is no way anyone is going to get this company on the cheap," Mr Grimsey said. "Focus is trying to take advantage of the stock market depression of old-economy companies. Wickes is worth a lot more than its current share price." GRANADA CONGLOMERATE: Faces Battles with Competition Regulators --------------------------------------------------------------- The Granada conglomerate faces battles with competition regulators on two fronts if it pursues plans revealed today by the Guardian to merge its hospitality businesses with Compass, the catering group, a report appearing in The Guardian says. The group's television arm is already embroiled in a inquiry by the competition commission into the ownership of the independent television network following its indication that it would bid for United News & Media and Carlton, two rivals in the throes of merging their businesses, the Guardian continue, and a move to spin off its hospitality arm - which ranges from Little Chef and Travelodge to the 400 hotels once owned by Forte - into Compass would run the risk of fresh conflict with the competition commission over the market power of the combined business in the UK. Together, the two companies would form the world's largest supplier of vending machines with Britain's leading operator of roadside restaurants, but represent only a 2.5% share of the ś200bn international food market. The companies refuse comment to the press, and their advisers, Schroders Salomon Smith Barney for Compass and Lazards for Granada, offer no insights. HYDER UTILITIES: Southern Co Prepares ś465 Mln. Bid for Troubled Co. --------------------------------------------------------------------- THERE is speculation that Western Power Distribution, part of Southern Co. of the US, is preparing to bid up to ś465 million for Hyder, the Welsh water and electricity company, in competition with Nomura of Japan. Reports suggest that the deal has been rescued by Citicorp, which has agreed to back a management buyout of the water business after Barclays Capital abruptly pulled out two weeks ago. MEPC PLC: BR Pension Fund to Buy Property Group's Assets for ś200m ------------------------------------------------------------------ MEPC, the property group, will today announce the sale of almost ś200 million worth of its smaller assets to the British Rail Pension Fund, The Times reports, explaining that the move is part of a push by MEPC, which is in the midst of a two-year restructuring plan, to offload a string of small retail and leisure properties in a move towards larger- scale property ownership. The BR pension fund is expected to pay more then ś190 million for the properties, a bargain price set by the continued poor performance of property stocks during the first five months of this year, The Times says, and the sale is expected to include the West One shopping centre on Oxford Street, Central London, which commands some of the highest retail rents in the country at more than ś500 per sq ft. MEPC is also expected to dispose of leisure centres in Park Royal, West London, and Luton. The company has reduced the size of its portfolio from 440 to 89 properties over the past two years. This latest sale will see the portfolio shrink to 86 properties at the most. The company would not comment, however, on speculation that the property sale was part of a bigger sell-off plan, which could lead to as much as ś1.2 billion of the group's assets being disposed of by the end of the year. MEPC has talked of a move into larger office and business park developments since James Tuckey, its former chief executive, resigned last May to be replaced by Jamie Dundas. The company has already made ś1 billion worth of disposals, mainly from assets in Australia and the United States. Some ś400 million of the money raised from those disposals was returned to shareholders via a share buyback. It is understood that MEPC is planning a further share buyback once the current round of disposals is complete. The sell-offs and buybacks are part of an attempt by MEPC to boost its flagging share price, which, along with the rest of the property sector, has tumbled to a huge discount in the past two years. RANK: Indebted Leisure Group To Sell Stakes in Universal -------------------------------------------------------- Rank, the debt-laden leisure group, is thought to be close to tying up the sale of its stake in Florida's Universal Studios Escape theme park for about ś300 million. The deal, with an unnamed US investment firm, would be the latest in a string of disposals by Mike Smith since he became chief executive of Rank a year ago. In recent weeks Mr. Smith has raised almost ś500 million by selling Rank's bars and nightclubs division, Odeon cinemas and Pinewood Studios. The Tom Cobleigh pub chain is also on the market. Potential buyers of the 50 per cent Universal stake include Apollo, Blackstone, Kohlberg Kravis Roberts and Hicks, Muse, Tate & Furst. SOMERFIELD: Crisis is Intensifying, Lost More Than Qtr of Its Market --------------------------------------------------------------------- The crisis at Somerfield is intensifying, according to fresh market data that shows the 1,700-store company has lost more than a quarter of its market share in the past year. Figures from Taylor Nelson Sofres show that the combined Somerfield and Kwik Save group's command of the market has slipped by 2.5 points, to 7.1 per cent. This works out at ś137 million of lost shopping income, which its 1,400 stores have seen slip away in the month of April alone. David McCarthy, analyst at Schroder Salomon Smith Barney, tells The Times: "For a supermarket group to lose a quarter of its market share in 12 months is absolutely staggering. Some of that may be down to a few stores closing, but not much." He said Asda was probably winning most of the defecting shoppers. "Asda has a similar price base and it's in the same places." The company's market capitalisation has collapsed from ś2.2 billion to ś270 million in the past 18 months alone, as its acquisition of Kwik Save started to go badly wrong. According to the Taylor Nelson figures, compiled by its Superpanel unit, Tesco remained the clear market leader in the four weeks to April 30 with a 24.8 per cent market share. Sainsbury's is next, with an 18.6 per cent share - down on the 19.2 per cent share it enjoyed in April last year. Asda picked up sharply, with 16.5 per cent share, against 14.9 per cent. Safeway, now run by Carlos Criado Perez, stood at 10.1 per cent against 9.6 per cent. TECHNICOLOR: Film Print Processing Business Up for Sale ------------------------------------------------------- Carlton Communications, the media group, has begun the sale of Technicolor, the film print processing business, which it hopes will raise ś1.5bn, according to the Financial Times, adding that the company is understood to have appointed UBS Warburg to handle the divestment of Technicolor, as Carlton seeks to trim its non-core interests to focus on television and future online opportunities. The sale, the Times suggests, could prove to be keenly contested, as Carlton is thought to have elicited expressions of interest from financial buyers attracted to the strong cashflow, trade buyers seeking to consolidate their position in the film processing business and companies looking to build digital processing capability. Potential trade buyers could include: * Bertelsmann of Germany, * Time Warner of the US, * Matsushita of Japan and * Cinram of Canada. Carlton last year announced plans to merge with United News & Media to create the leading company in independent television in the UK. The merger proposal is before the UK competition authorities, which are due to give their recommendations at the end of next month. WHITBREAD: Poised to Sell Breweries for Up to ś400 Million ---------------------------------------------------------- Whitbread is on the brink of agreeing the sale of its brewing operations to Interbrew, the Belgian owner of the Stella Artois lager brand, for between ś300m and ś400m. Insiders say a deal is imminent to end Whitbread's 250-year involvement in the beer making industry. Unless a last minute hitch emerges, the disposal of Whitbread's brewing operation could be announced some time this week. The move is part of a strategic review by Whitbread's chief executive, David Thomas - who has watched the company's shares fall by half during the last year, The Guardian reports. Mr Thomas wants to concentrate on faster growing operations, such as health clubs and budget hotels. Whitbread is Britain's third largest brewer after Scottish & Newcastle and Bass. The sale will include breweries in Manchester, Salmesbury in Lancashire and Magor in Wales, along with two regional distribution centres and 17 satellite sites, employing a total of 4,500 people. The bulk of Whitbread's production is of Heineken and Stella Artois - which it brews under licence for the European brand owners. The company also produces Boddingtons, Murphys, Wadworth 6X and a variety of beers designed to serve smaller niche markets. S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter Europe is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC. Peter A. Chapman and Sharon Cuarto, Editors. Copyright 2000. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re- mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is $575 per half-year, delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *