European Business News (EBN), 97-01-06

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From: The European Business News Server at <http://www.ebn.co.uk/>

Page last updated January 6 1400 CET

CONTENTS

[01] Vebacom confirms purchase of Urbana

[02] French Finance Minister says new bank members will assure stability

[03] Waigel forecasts 73 - 4 billion mark for 1996

[04] Orange boosts market share

[05] Daewoo stays interested in Thomson

[06] Schneider indicted for fraud

[07] Chunnel resumes coach traffic

[08] Clyde board seeks to reject Gulf bid

[09] Japan December car sales climb 13%

[10] Vendex launches takeover bid for BIS

[01] Vebacom confirms purchase of Urbana

Vebacom, a joint venture between energy group Veba and British telecoms group Cable and Wireless, said the purchase would increase its share of Germany's cable television market to 10% from 7% currently, propelling it into the number-two slot among Germany's cable television network providers.

The purchase was made by Vebacom's subsidiary Tele Columbus. Urbana has some 550,000 cable TV subscribers and had sales of 80 million marks in its 1995/96 business year. With the acquisition, Vebacom now has 1.6 cable TV subscribers and its cable TV network passes 1.9 million homes, which is a measure of how many homes could be connected to the network.

German phone giant Deutsche Telekom AG has had a monopoly on the trunk cable TV network in Germany, which connects over 16 million homes. But Telekom only has around 5.5 million cable TV subscribers under direct contract.

The remainder are under contract to dozens of local and regional cable TV operators who connect their customers to Telekom's trunk network. Vebacom was Germany's number two cable TV operator and Urbana the third-largest.

[02] French Finance Minister says new bank members will assure stability

On the other hand, Monetary Policy Council member Paul Marchelli says that the pace of easing of short-term rates in France could pick up. Speaking to 'La Tribune' newspaper in the wake of last week's selection of two new members, Marchelli says 'the policy we have followed until now will continue to be pursued and may even accelerate.'

Economists see the government's decision to appoint two moderates to the Bank of France's governing body as an attempt by President Jacques Chirac to increase his influence over the central bank and to push it modestly toward a more pro-growth, low interest-rate policy.

[03] Waigel forecasts 73 - 4 billion mark for 1996

This would be in line with predictions made in November, and would keep Germany on course to meet the Maastricht budget criteria. But the Finance minister will wait for important economic data before deciding whether to push for a budget freeze in 1997, in addition to the final 1996 results.

Earlier in the day, Economics Minister Guenter Rexrodt had voiced scepticism about whether the government could achieve its stated goal to halve unemployment by the year 2000.

'I am very worried that there has been no improvement in the labour market despite the positive development of the economy in the past months,' Rexrodt was quoted as telling Bild newspaper in an interview published on Monday.

'Against this background it will be difficult to halve unemployment in the next three years.' Rexrodt said it was more important to have set the goal than to reach it exactly.

Germany's DGB trade union congress said that unemployment would set a new post-war record this month, breaking the previous record of 4.2 million set last February.

The warnings come on the same day as Gerhard Schroeder, premier of the German federal state of Lower Saxony, expressed renewed doubts about the introduction of the single European currency and said he is unwilling to let the discussion drop. Last week, Schroeder said EMU shouldn't have priority over other issues such as unemployment, a stance that drew criticism both from within the SPD and the government.

Schroeder, a possible chancellor candidate for the Social Democratic Party in the 1998 elections said that his 'justified doubts' warrant further discussion. In reply, Finance Minister Theo Waigel called Schroeder's remarks 'populist'.

Specifically, Schroeder expressed doubts about financial transfers between European Union members, particularly between those which adopt the single currency and those not yet selected to participate. Combining different currency areas of varying economic strength will result in 'distortions', Schroeder said. He also said that disparities in social welfare systems among EMU members could lead to a migration of European workers to Germany.

Following calls from within the SPD to adhere to the party line, Schroeder said he 'won't permit' a halt to the debate. The party is scheduled to officially adopt its stance on EMU at a party conference in early December.

[04] Orange boosts market share

In its best ever quarter during the last three months of the year, the company added 125,000 customers to its all-digital network. Orange claimed it now had an 11.5% share of the total UK market, up from 7% at the end of 1995. Over 1996, it captured 29% of net market growth.

Orange's figures confirm the positive trend in the British cellular market shown by both Vodafone Group and Cellnet, which is 60% owned by British Telecom.

Vodafone, the market leader in Britain, last week reported a 20% annual increase in subscriber numbers to some 2.8 million at the end of December. Cellnet ended last year with 2.68 million customers, against 2.3 million at the end of 1995.

Managing director Hans Snook said, 'We look forward in 1997 to continuing to move ahead and to extending our international service through new roaming agreements and the introduction of dual band handsets.'

[05] Daewoo stays interested in Thomson

Its chairman, Bae Soon Hoon, said 'Our intent was utilising the synergy of acquiring Thomson,' Bae said. 'That intent hasn't changed.'

In October, the French government announced that Daewoo, in partnership with Lagardere Groupe of France, won the right to acquire state-managed Thomson SA, which controls television maker Thomson Multimedia. Daewoo's acquisition of Thomson would have made the company the largest manufacturer of televisions in the world, and the biggest seller of televisions in the U.S.

But in early December, a French privatisation commission cancelled the deal, stating that Thomson Multimedia shouldn't be sold to a non-French firm. The French government then delayed the sale of Thomson.

Daewoo officials, as well as South Korean government officials, have loudly protested the decision. 'We consider it unfair,' Bae said. Daewoo's next step, Bae says, 'depends on the French government's new procedure' for selling Thomson, which hasn't yet been announced. Bae expects that the French will make that announcement as early as this week.

And he is still hopeful that Daewoo will be able to acquire Thomson. 'Why shouldn't I be optimistic? The political problem is not Daewoo, but employment and security of jobs,' Bae says. 'Thomson has to produce more TV sets to keep jobs in France. Who is willing to do this? Only Daewoo.'

[06] Schneider indicted for fraud

Frankfurt prosecutors announced Monday that Schneider has been charged with fraud, credit fraud, bankruptcy fraud and forgery. His wife, Claudia, was accused of bankruptcy fraud.

Schneider and his wife fled Germany in April 1994 as his business empire crumbled into a mountain of debt. They were arrested in Miami in May 1995.

[07] Chunnel resumes coach traffic

Operator Eurotunnel said, 'People must book. A coach takes up the whole of a carriage. So as not to disrupt tourist traffic, we must plan things out.'

Only trains carrying heavy goods lorries are still unable to use the under- sea link. Freight trains restarted on November 21, Eurostar car shuttles on December 4, and tourist shuttles on December 10.

Eurotunnel foresees a return to full commercial operations around mid-May after repairs to the fire-damaged tunnel.

The rapid restart of most services after the fire prompted criticism from some British members of parliament and fire brigade trade unions.

[08] Clyde board seeks to reject Gulf bid

Clyde, which operates mainly in Britain, Holland, Indonesia and Australia, claimed the offer wildly undervalued the company, pointing out that operating cash flow and profits, production and reserves, were all at record levels. The company was delivering sustainable, progressive dividends to its shareholders, it said.

'Gulf Canada's offer dramatically undervalues Clyde on a cash flow multiple basis,' said chairman Malcolm Gourlay. 'An independent Clyde will deliver a far better return for our shareholders than this low offer - it's fairly much of a no-brainer to reject this offer,' he said.

In its defence document, Clyde said the bid put it on a cash flow multiple of 5.7 times, which is unfavourable compared to similar international companies trading on an historic (1995) multiple of 8.9 times and Gulf Canada on 12.7 times.

Gulf Canada's cash offer of 105 pence per share was considered too low by many analysts when it was launched on December 18

[09] Japan December car sales climb 13%

According to the Japan Automobile Dealers' Association, in 1996 overall auto sales climbed 4.4% to 5.38 million units, marking the third year of year-on-year increases.

Auto industry officials say that the growth in last year's overall auto sales remained only moderate, reflecting the slow recovery in the domestic economy.

While the sales of traditional passenger cars were sluggish, the increase was led largely by sport-utility vehicles and minivans.

By manufacturer, the two top makers, Toyota Motor and Nissan Motor, both reported a slight increase in their sales. With its popular line-up of new leisure vehicles, Honda Motor replaced Mitsubishi Motors as the third biggest domestic player for the first time since 1990.

[10] Vendex launches takeover bid for BIS

Vendex has acquired a 60% stake in the company from its major shareholder and said it expects the total cost of the deal to be 830 million guilders.

Vendex said it will pay 490 francs per share for the 60% stake and will shortly bid the same amount for the remaining shares. The takeover of BIS will be paid in cash and from existing bank lines. It is expected to have a 'slight positive' effect on earnings per share in Vendex's 1998 fiscal year.

BIS has some 5.1 million shares outstanding and is listed on the Paris stock exchange. It is the third largest temporary employment business in France and had 1995 turnover of about 3 billion guilders. Vendex International also said it may list its services group separately on the Amsterdam Stock Exchange and that it is mulling filing for a listing. Vendex was listed on the Amsterdam Stock Exchange in 1995 in an offering that was vastly oversubscribed and one of the year's most successful.

From the European Business News (EBN) Server at http://www.ebn.co.uk/

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