What The Papers Said: A roundup of Sunday business stories

Bass, the pub and hotel group, is understood to have won the battle to buy First Leisure's family entertainment business with a bid of over pounds 100m. The Bass offer is believed to have comfortably exceeded one from Allied Leisure. The key attraction for Bass is First Leisure's 26 tenpin bowling alleys, which it plans to merge with its own Hollywood Bowl chain.

Richard Branson and One2One will this week announce the creation of 500 jobs as they finalise plans to bring out a Virgin-branded mobile phone service. The recruits will staff a call centre in Trowbridge, Wiltshire. A team of 50 staff has already been put in place to oversee the project.

A pounds 7bn windfall maybe looming for shareholders in Allied-Domecq, the drinks, pubs and fast food group. The pounds 2.6bn sales of Allied's Ind Coope, Big Steak Pub and Firkin pubs chain is increasingly seen in the City as a prelude to the group's disappearance through a series of corporate raids.

Anglo-Dutch oil firm Royal Dutch/Shell is weighing up a possible pounds 18bn takeover of BG, the gas-pipeline network operator. Shell, which has avoided the oil mega-mergers executed by its rivals Exxon and BP, believes acquiring BG could add significant value. Shell previously considered a bid for British Gas in 1996 before it split into BG and the Centrica trading and supply business.

McDonald's, the American fast-food giant, is thought to be considering an attempt to buy Hard Rock Cafe, the international burger chain owned by Rank Group. Though Rank has not received an official offer, McDonald's is considering further diversification after decades of concentrating purely on burger franchises. Andrew Taylor, chief executive of McDonald's UK, is understood to be particularly keen on the purchase.

A slim majority of City analysts believe interest rates will be cut again this week following a meeting of the Bank of England's monetary policy committee (MPC). Idea, the financial-research company, says 55 per cent of analysts surveyed believe the bank will cut rates by a quarter of a point to 5 per cent this week. "They see the strength of sterling as the prime reason for the cut," said Mike Gallagher, director of research at Idea.

Pearson, the media group that publishes the Financial Times, is searching for a leading Internet executive to head its drive to develop its web- based business service and information products. Stephen Hill, chief executive of the FT Group subsidiary, has been meeting potential executives in California's Silicon Valley. A separate market listing for the Internet unit, which would encompass FT.com, the paper's web site, is thought to be under consideration in order to be able to offer share options to attract top rank American staff.

Erotica, the company that organises adult entertainment fairs, is planning to float on the stock market next year. As a precursor to the flotation, Erotica, which has organised industry trade fairs in New York and London and is planning other ventures in New York and Moscow, is seeking pounds 8m from investors to help it develop its electronic commerce strategy. The company is soon to appoint a financial advisor to value it in advance of seeking a listing on either the UK Alternative Investment Market or NASDAQ in the US.

Executives from Britain's leading commercial broadcasting companies, including BSkyB, Granada, Carlton and United News and Media, are planning a last-ditch protest against the introduction of a digital BBC licence fee. They will lobby Gavyn Davies, the Goldman Sachs economist, who is leading a government-appointed committee reviewing the BBC's funding. The committee is thought to favour increasing the licence fee to around pounds 130 for digital sets as the best way of meeting the BBC's increased need for money following the introduction of digital technology.

Great Universal Stores, the mail order group, is accusing the Knickerbox high street chain of stealing its `Kit' brand name for a popular line of sexy underwear and nightwear. The legal wrangle follows Knickerbox's use of the word `Kit' for a wardrobe of smalls launched last September. GUS, which uses its own `Kit' label to sell summer dresses and cropped tops, is seeking a court order to stop its rival from allegedly infringing its trademark.

Deutsche Telekom continues to look at launching a pounds 6bn bid for Energis, the UK Internet and telecoms group 49 per cent owned by National Grid. Industry sources say the German telecoms giant has talked to executives from both Energis and National Grid, though the power generator is thought to be reluctant to further reduce its holding. Deutsche Telekom, which recently failed in an attempt to merge with Telecom Italia, already has close ties with Energis through a pounds 100m joint venture that also includes France Telecom.

The British Retail Consortium (BRC) is expected to reveal tomorrow that high street spending slumped dramatically in May. Retailers who have seen the BRC's unweighted weekly figures expect the monthly sales monitor to show a fall in like-for-like sales, dashing hopes that retail spending is on the verge of recovery. It is believed that the BRC figures will show clothing retailers to have been particularly hard hit.

Sir Colin Chandler is expected take over as chairman of Racal Electronics when the incumbent and founder of the group, Sir Ernest Harrison, steps down next year. Sir Colin, currently the non-executive chairman of tanks to engineering group Vickers, was appointed a non-executive director of Racal last week.

Switzerland is blocking moves to freeze Swiss bank accounts belonging to the Yugoslav president Slobodan Milosevic. Swiss government officials say they are refusing to act because of confusion over the terms of the peace deal struck between Nato and Yugoslavia. They believe Nato has agreed not to press the war crimes indictment against Mr Milosevic, despite a pledge by the Foreign Secretary, Robin Cook, that the Yugoslav president must stand trial.

The City is managing more money in shares than any financial centre in history, with pounds 2,100bn under management last year, according to a survey by consultancy Thomson Financial Investor Relations. The survey, which polled 6,000 fund management groups world-wide, reveals that London runs 9 per cent more in equity funds than New York, its closest rival.

One of the capital's biggest bus companies, London United, is recruiting 100 French workers to overcome a growing shortage of British drivers. So far, it has eight French drivers on the road, 45 at various stages of training, with about 50 more to come. Despite most having no professional driving experience, particularly of driving on the left, and some speaking little or no English, London United says its has been "very impressed" with the drivers' performance.