City File: Allied-Lyons

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ALLIED-LYONS has long been a candidate for a rights issue. And tomorrow it is expected to go part of the way with an issue of convertible preference shares raising at least pounds 200m.

It will do so on the back of full-year profits as flat as day- old lager at pounds 610m, and worries that it has been unable to complete the merger of its off-licence chain, Victoria Wine, with Bass's Augustus Barnett.

Bass reports its half-year results on Wednesday. It is likely to show pre-tax profits down a tenth at pounds 250m. Though the beer market will be reassuring, the old worries about the Holiday Inns hotel group are expected to resurface.

Neither share looks particularly attractive at current levels.