The Week Ahead: Bidding could hit £1.4bn for jewel in the crown of Boots

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The Independent Online

Chief executive Richard Baker announced earlier this year that the business - Boots Healthcare International (BHI) - was to be sold off. While the retail side of Boots has suffered from a consumer slowdown and tough trading in recent months, BHI continues to be a jewel in its crown. The City has put a value on the division - which owns Nurofen, Clearasil and Strepsils - of around £1.1bn.

However, JP Morgan analyst Simon Irwin says the price could in fact go as high as £1.4bn. "We think that the portfolio of products is very attractive and other people may be able to make more money out of the assets than Boots because of economies of scale."

Mr Irwin adds that, with a strong marketing push, the US could prove a huge market for Nurofen. Its main painkilling ingredient is ibuprofen, a drug regularly used by arthritis sufferers.

A host of names have been linked with BHI, including Reckitt Benckiser, GlaxoSmithKline, Procter & Gamble and Johnson & Johnson, as well as various private equity buyers. However, few in the City are expecting a speedy sale, with a shortlist of interested parties likely to be drawn up in the coming weeks before a deal is struck towards the end of the year.

Boots will not be the only retailer in the City's sights. As well as full-year results from online fashion outfit Asos, there will be trading updates from Marks & Spencer, Blacks Leisure, Halfords and Mothercare.

It is a crucial time for the high street, which is suffering from both a slump in consumer spending and the fallout from last week's terrorist atrocities in London, so the City will be paying close attention. In particular, it will want to hear not only about current trading but about the outlook of managements for the coming months.

Other companies updating on trading or putting out results include car dealership Reg Vardy and Inter Link, which makes own-label cakes for a host of retailers. There is also a clutch of annual general meetings. Addressing investors will be the London Stock Exchange, music giant EMI and BAA, the owner of Heathrow, Gatwick and Stansted, among others. The airport group is also publishing June traffic figures.

Shareholders in BAA who support the Stop Stansted Expansion campaign are seeking to change one of the company articles. This would mean the board having to obtain investor approval before submitting any planning applications for investments where the total cost would involve spending over 50 per cent of shareholder funds. However, BAA has questioned whether the planning stage is the right time to seek such approval, and few believe the resolution will be passed.

The biggest names reporting, though, are overseas. In the US, there will be results from the iconic Harley-Davidson, fast-food giant Yum! Brands - the owner of Pizza Hut and Taco Bell - hotel chain Marriott International, General Electric and Apple Computer, home of the iPod.

In mainland Europe, few companies are issuing results, although Sweden's Saab (which makes planes now, not cars) does have second-quarter numbers out and France's L'Oréal is expected to show underlying growth of just over 5 per cent when it publishes second-quarter sales on Tuesday.

But that does not mean news will be thin on the ground - after all, it rarely is when Eurotunnel is involved. On Monday, the debt-stricken Channel Tunnel operator, which has endured a series of boardroom spats and attempted oustings in recent months, will publish its first-half 2005 revenue and traffic figures. And most company watchers are expecting bad news.

Then, at the end of the week, the company is expected to launch the opening gambit in its attempt to restructure its £6.4bn worth of debts, presenting a restructuring plan to its banks. This is likely to include a call for the creditors to write off billions of pounds worth of debts.

Back home, and another troubled company likely to be in the news is MG Rover, with speculation growing that part of the failed car manufacturer could soon be sold off. Administrator PricewaterhouseCoopers insists that it is still considering bids for the company, but some of the bidders believe an announcement could be made as early as this week. MG Rover went into administration in April after plans to form a joint venture with Shanghai Automotive Industry Corporation collapsed because of concerns over the Longbridge-based company's solvency. Shanghai Automotive and a British consortium led by David James, the turnaround expert who was brought in to sort out the Millennium Dome, are among at least four groups believed to be making bids.

Meanwhile, as markets continue to pick themselves up and get back to business as normal following the terrorist attacks, there will be a number of key economic announcements. These include unemployment data, inflation figures for June and an update on the trade balance.

CALENDAR

Tomorrow 11

UK: Results: (final) Asos; (interim) St Modwen Properties.

Tuesday 12

UK: Results:

(F) Broker Network Holdings, Glotel, Halladale Group, Immunodiagnostic Systems, Pace Micro Technology.

Wednesday 13

UK: Results: (F) Bespak, Center Parcs UK, Inter Link Foods, Reg Vardy.

Thursday 14

UK: Results: (F) Biofuels Corporation.

Friday 15

UK: Results: none scheduled.

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