Sunday newspaper round-up: Premier Foods, Prudential, Tesco

3rd Oct 2010 11:34

Shareholders have opened fire on Premier Foods for failing to cut debts of £1.4bn and are calling for a shake-up at the company that produces brands such as Hovis, Mr Kipling, Bisto, Sharwoods and Homepride, the Observer reports.The calls come as Premier Foods's share price has crashed to 16p - close to an all-time low - and as new chairman Ronnie Bell, a former boss of Kraft in Europe, prepares to take over from David Kappler on Monday. The company is viewed as a potential takeover target, despite its £400m pension deficit.Shareholders have also questioned the future of chief executive Robert Schofield, but he is understood to have the backing of Bell.The Sunday Times, meanwhile, thinks the company is touting Quorn, its meat substitute product, looking for buyers at somewhere between £200m and £250m. As well as Quorn, it is understood to be weighing up other possible disposals from its portfolio of brands.Prudential should sell its American business before hiving off its Asian assets, a confidential strategic review designed to appease investor concern about its inherent value has found. The Sunday Telegraph said the review, undertaken by bankers at Goldman Sachs at the behest of the company's besieged management, found that if the British insurer needed to dispose of an asset, it should be its US operations ahead of its much-vaunted Asian business.Although the work found that it would make sense to hive off the high-growth Asian business at some stage in the future - perhaps through an initial public offering - doing so in the current environment would not create any extra value for shareholders.Supermarket giant Tesco's plan to march into the home loans business this autumn is facing a severe delay - the grocer has yet to receive permission from the Financial Services Authority (FSA) to offer mortgages, according to the Observer.Tesco's new banking arm had hoped to launch mortgages before Christmas, followed by current accounts next year. However, it is understood that the supermarket could be bogged down in red tape for up to 12 months.Tesco confirmed that the new banking products were behind schedule: "The FSA is just being careful. It is a new process and it is very difficult."Back on its traditional turf of supermarket retailing, Tesco, is set to embark on a major UK store opening programme in the next six months, the Telegraph reports, as it looks to extend its lead in the cut-throat supermarket wars.Tesco will open 1.7m square foot of new space in the UK in the second half of its financial year. This space is equivalent to around 16% of rival Wm Morrison's entire store base. In the first half of its year, Tesco opened just 0.4m square feet.The company is set to announce its interim results on Tuesday and may unveil details of the plan then.General Electric (GE), the American conglomerate, is the mystery bidder plotting a £800m-plus takeover of Wellstream, the oil services firm, the Sunday Times claims.The Newcastle-based company, which makes specialist pipes used in offshore oil exploration, said last month that it had received a "number of preliminary approaches" but declined to reveal the identity of its suitors.Other bidders have since expressed an interest, although GE is understood still to be the leading contender. Wellstream has hired Rothschild and Credit Suisse, the investment banks, to mount its defence.China's challenge to BHP Billiton's $39 billion (£25 billion) takeover of one of the world's largest fertiliser makers is crumbling, with City sources saying it is struggling to mount a counter bid. The Sunday Times says Sinochem, the Chinese state-backed chemicals giant, has drawn a blank in its efforts to assemble a consortium of groups to mount a white knight offer for Potash Corp of Canada. The banking sources also say it is not clear whether Beijing considers the deal sufficiently strategic to throw the full weight of the state behind the campaign.