European Business News (EBN), 97-10-02

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CONTENTS

[01] S-E-Banken plans to merge with Trygg-Hansa

[02] US says it hasn't yet decided on action over Total's contract with Iran

[03] M.A.I.D moves to forefront of the online business information market

[04] Sharp fall in August's German industrial production data, much worse than expected

[05] Rhone-Poulenc succeeds in tender for US Rorer unit

[06] Most Asian stock markets decline as currency turmoil unnerves investors

[07] US factory orders rise 1.3% in August

[08] GM Is moving Its Delphi stock offering to the slow lane

[09] Credit Foncier net profit falls 28% in first half

[10] Artemis plans to keeps Worms' Athena insurance unit intact

[11] Orkla earnings rise 34% to $320 million in the first eight months, beating market expectations

[12] WorldCom's surprise MCI bid turns industry on its head

[13] Russian consumer prices fall for second consecutive month

[14] Marriott plans to beef up its international hotel chain

[15] Promodes runs ad hoping to sway Casino shareholders to accept bid

[16] Corporate and Economic Briefs

[01] S-E-Banken plans to merge with Trygg-Hansa

S-E-Banken said in a statement it was offering 244 Swedish crowns ($32.5) cash per Trygg-Hansa share or 13 new S-E-Banken series-A shares for every five Trygg-Hansa shares.

'The premium in the cash bid amounts to about 30% and in the share bid to about 27% compared with share prices in the past 10 days,' the bank said.

Based on the average closing price of 91.3 kronor of A-shares in S-E-Banken during the last ten days, and the assumption that 75% of the number of shares in Trygg-Hansa will be handed in under the cash alternative and 25% of the Trygg-Hansa shares will be handed in under the share alternative, the total value of S-E-Banken's bid will be 16.8 billion kronor ($2.35 million), the bank said.

The bank said it intended to nominate S-E-Banken's current chief executive Jacob Wallenberg as chairman and Trygg-Hansa's chief executive Lars Thunell as president and chief executive.

S-E-Banken said annual synergies would amount to about 775 million crowns ($103.3 million) before tax within five years.

The sum could be divided into about 500 million crowns in cost savings, which to a large extent was expected to be reached within two years, and about 275 million crowns from income synergies.

Restructuring costs would amount to around 500 million crowns before tax, the bank said.

[02] US says it hasn't yet decided on action over Total's contract with Iran

Washington seeks negotiated compromise with Europe, but some call for sanctions in first test of controversial trade law

With European leaders warning the U.S. against retaliation over a controversial French-Iranian natural-gas deal, Secretary of State Madeleine Albright said the U.S. hasn't yet decided how it will respond to Total's contract.

The deal, led by the French oil company in partnership with Russia's Gazprom and Malaysia's Petronas, is the first test of a 1996 U.S. law that directs the president to impose sanctions on foreign companies that invest more than $20 million in Iranian energy projects.

Russian President Boris Yeltsin was the latest European leader to warn the U.S. not to penalise the companies over the deal. 'Interference from any other state is not to be tolerated,' Yeltsin said, according to the ITAR- Tass news agency.

President Clinton has some leeway in applying the law. The administration has so far managed to head off a similarly heated conflict with its European allies over Cuba, waiving certain sanctions in exchange for increased European pressure on the Castro government. Albright declined to say whether a similar compromise could be reached over Iran and the Total deal, which was announced Sunday.

'Let me say that we obviously would like (the Europeans) to understand better our approach to Iran,' she said in an interview. 'I truly am not yet prepared to say what we will be doing on it, because this happened just now. We are examining how (the law) itself is carried out, and we are going to be very careful in how we apply this.'

A senior aide to Albright said the law is structured, in part, to rally international pressure against Iran. At the same time, he said, Europe hasn't done enough to press Tehran to stop supporting international terrorism and developing nuclear weapons. European nations' actions 'across the board have fallen far short of what we and everyone else would consider adequate,' said Alan Larson, assistant secretary of state for economic and business affairs.

But, as Washington sought a negotiated solution to the potential trade war with Europe, some members of Congress urged the Clinton administration to act decisively to impose sanctions on the French oil giant Total and its Russian and Malaysian partners.

U.S. House International Relations Committee Chairman Benjamin Gilman and Senator Alfonse D'Amato, chairman of the Senate Banking Committee, called for 'swift, decisive action' on sanctions.

'If the US does not take swift, decisive action to apply these available sanctions, we will undercut our long-standing policy against Iranian terrorism, a policy which you have advocated at the summit level on many occasions,' Gilman and D'Amato said in a joint letter to Clinton.

'If we do not sanction Total as a ...violator, it is likely that foreign investment will pour into Iran's oil and gas fields,' the lawmakers said.

They said the three companies and their respective governments were warned that the contract would represent a bad precedent. `Administration policy toward Iran is in jeopardy and our nation's credibility in the fight against terrorism hangs in the balance,' they said.

[03] M.A.I.D moves to forefront of the online business information market

Purchase of Knight-Ridder for $420 million will catapult M.A.I.D. to the top of its market

M.A.I.D moved to the forefront of the online business information market, having wooed and won Knight-Ridder Information in a $420 million deal.

M.A.I.D, whose market capitalisation is just over £200 million, said it will pay £261 million ($420 million) for Knight-Ridder Business Information Services, which provides electronic news, business, scientific and technical data. The purchase includes Knight-Ridder Information AG, a Swiss unit, and minority interests in related units.

The deal, which is due to be completed in November, will catapult M.A.I.D. to the top of its market, combining its 3% global share with Knight- Ridder's 22%. That puts the combined company ahead of Reed Elsevier's Lexis- Nexis unit, currently the largest player with a 24% share of the on-line business database market.

M.A.I.D. still has to come up with the finance for the deal and plans to place new shares with institutional investors later this month to raise around £118 million. It has also secured loans and notes worth $270 million. 'It's like a new listing,' M.A.I.D. Chief Executive Dan Wagner said. 'You could look at it as Knight-Ridder Information floating on the London Stock Exchange.'

M.A.I.D. expects the deal to enhance earnings from 1998. Wagner said that assumption 'doesn't rely on disposals or revenue growth beyond a couple of percent.'

Trading of M.A.I.D. shares was suspended in London and on the Nasdaq pending shareholder approval of the deal, in keeping with standard London stock exchange procedure.

Upon completion of the acquisition, M.A.I.D. will rename the entire group Dialog Corp. M.A.I.D.'s data centre in the UK will be moved to Knight- Ridder's facility in California., and non-core disposals are planned.

The deal was first proposed in the market in August, and analysts began praising it then. They said it will give M.A.I.D. the content it needs to exploit its widely respected technology. That technology includes Infosort, a way of indexing databases that allows users of M.A.I.D.'s Profound search engine to use simple key words and still get well-targeted results.

[04] Sharp fall in August's German industrial production data, much worse than expected

The fall was mainly due to school summer holidays, the Economics Ministry said. A decline was widely expected, and private-sector economists were unperturbed, saying it did not contradict their view that the economic expansion was still firmly in place. The Bundesbank is likely to take the data in stride, continuing to monitor domestic developments that give no reason for immediate action, they said.

But German interest rates will eventually have to rise slightly to converge with other prospective members of European monetary union, they said.

Industrial production fell a seasonally adjusted 3.2% in August from July, when output rose by 3.9%, the ministry said. It added that the preliminary August figure was likely to be revised down. The annual increase was 2.7%. Analysts had forecast a 2.0% decline on the month and a 3.9% increase year- on-year.

'The August figures look really negative but (that view) is not justified,' said economist Matthias Haffner at Barclays Bank in Frankfurt. 'They have to be viewed in connection with the holiday figures.'

July and August output taken together are still well above the two preceding months, so the underlying upward trend is still in place, Haffner said.

Meanwhile, construction in Germany fell 7.2% in August from July and dropped 15.6% from August 1996, the ministry reported.

In western Germany, construction volume plunged an adjusted 8.5% on the month and an unadjusted 13.8% on the year. In eastern Germany, construction volume fell 4.3% on the month and declined 17.5% on the year.

Energy output in all of Germany also slipped 1.0% on the month and showed a decline of 1.8% on the year.

Mining output was little changed on the month - a rise of 0.1% was reported - and fell 2.1% on the year in all of Germany.

[05] Rhone-Poulenc succeeds in tender for US Rorer unit

The tender offer closed Oct. 1 at 2100 GMT, when the US stock market closed. The company said 46,273,472, or 95.9%, of RPR shares were tendered .

Rhone-Poulenc had owned 68.1% of RPR before it made the 27 billion francs ($4.5 billion) offer in mid-August, at $97 a share, for the 31.9% of Rhone- Poulenc Rorer it didn't already own.

The company said it would increase its holding of Rhone-Poulenc Rorer to 100% by merging the US unit with a wholly-owned US unit of Rhone-Poulene that was created for this purpose. After the merger, Rhone-Poulenc Rorer shares will be cancelled and converted directly into $97 a share in cash, Rhone-Poulenc said. Rhone-Poulenc is buying back the unit as part of a restructuring that includes increasing its focus on life sciences and spinning off its chemicals and fibres and polymers businesses into a separate unit. Rhone-Poulenc plans to take a 9.5 billion franc charge for its restructuring in the 1997 full year results while maintaining its forecast of a 20% rise in earnings per share, before exceptionals. The charge is likely to result in a hefty net loss for 1997 compared to the 1996 profit figure of 2.7 billion francs ($454 million).

The 27-billion acquisition of Rorer will be partly financed by the share issue and some 13 billion from the sale of assets and the flotation of a stake in Rhodia.

This will leave another seven billion francs which would increase its debt. At the end of 1996, net debt stood at 33.8 billion francs.

[06] Most Asian stock markets decline as currency turmoil unnerves investors

A rally in New York failed to influence Tokyo, where traders were focused on further evidence of a weak economy and concerns over upcoming earnings.

The key Nikkei 225-share index fell 211.69 points to 17,630.47.

The New York advance did help rally stocks in Australia and New Zealand in early Far East trade, but Southeast Asia markets remained under the gun of Malaysian Prime Minister Mahathir's verbal war on currency trading.

With positive news on the economic front bolstering the U.S. bond market, the Dow Jones Industrial Average climbed 70.24 points on Wednesday to surpass the key 8,000 level for the first time since mid-August. It ended at 8,015.50.

But the news did little to offset the drama of Southeast Asia's currency jitters.

Philippine shares were hard hit, falling 2.06%, or 42.51 points to 2025.11. They later recovered slightly to end down 1.75%, or 36.15 points, at 2, 031.47.

Dealers cited the volatility in the peso and concerns over bank loan defaults as major factors behind the fall.

'Investors are extra-cautious because of the prevailing financial conditions,' Allan Araullo, executive vice president of Regina Capital Development Corp. said.

Weakness in the rupiah also dragged Indonesian stocks down, with the key index dropping 0.8%, or 4.33 points, to 532.66, while uncertainty over the direction of the ringgit kept a lid on Malaysian shares.

The key index was off 0.58 %, or 4.60 points, at 791.23 after being down over one percent in early trade.

Mahathir, on a visit to Santiago, Chile, on Tuesday reiterated a call for tight curbs or a ban on currency trading, dragging the ringgit to an all- time low of 3.4080 to the U.S. dollar on Wednesday. On Thursday, it recovered slightly to be quoted around 3.3200.

The regional currency traumas hurt Singapore shares, with the Straits Times Index falling 1.01%, or 19.53 points, to 1922.21.

'I can't think of any reason for the market to be going up,' one analyst said. Others noted any gains would be limited ahead of the October 15 release of a reform package for the finance sector.

Stocks in Taiwan felt the sting of a lack of confidence among investors and ended down 2.19%, or 190.36 points, at 8,504.66.

Australian shares forfeited early gains to be little changed at up 0.13%, or 3.5 points, at 2,782.7, while New Zealand stocks succumbed to profit- taking to be up 0.17 of a point to close at 2,575.26.

It earlier hit an intraday high of 2,593.24, bolstered in part by a rise in Telecom New Zealand.

[07] US factory orders rise 1.3% in August

The August increase compared with a revised increase of 0.5% in July to an adjusted $331.14 billion and an unrevised 1.7% rise in June to an adjusted $329.55 billion. Commerce previously reported the July rise as 0.2%.

Orders for durable goods in August rose 2.7% to an adjusted $186.55 billion, after rising 0.1% in July to $181.68 billion. In its advance report on durable goods, the department had already reported those orders rose 2.7%. Manufacturing orders excluding transportation as well as manufacturing orders excluding defence in August were both the highest levels on record, Commerce said.

If transportation equipment orders are excluded from the total, August factory orders rose 0.8% to $291.63 billion after rising 1.0% the month before. If defence capital goods orders are excluded from the total, August factory orders rose 1.3% To $329.42 billion after rising 0.6% the month before.

Factory orders are not adjusted for inflation.

[08] GM Is moving Its Delphi stock offering to the slow lane

The Delphi offering, which is likely to be one of the largest stock sales on record, had been expected in early 1998. But top GM officials now say more time is needed for GM to complete a planned combination of GM's Delco Electronics unit with the Delphi Automotive Systems unit.

GM has been contemplating selling as much as 20% of the combined Delphi- Delco to the public, which could raise about $3 billion, according to analysts. Analysts now expect the offering to be made no sooner than a year from now, and perhaps as late as two years from now. The No. 1 auto maker would keep the other 80%.

Holding off on making the offering isn't expected to crimp GM financially as it is sitting on a huge cash hoard of $14.9 billion as of June 30, and the auto business generally continues to boom. But industry watchers said the revised timing of the Delphi offering signalled that GM still faces a huge task in reorganising its noncore operations.

The combined Delphi-Delco business will have $32 billion in annual revenue and 210,000 employees. GM is understood to be seeking ways to cut the combined company's costs substantially, partly to attract the greatest value when its shares are presented to the public.

Delphi is to absorb Delco as part of a complex transaction involving the sale of the defence assets of GM's Hughes Electronics to Raytheon for $9.5 billion. Delco has been a unit of Hughes. The Hughes defence sale and the Delco merger into Delphi are two parts of what GM has been calling its 'triple play' plan to 'unlock shareholder value' in some of its biggest subsidiaries.

The third part would be a recapitalization of GM's H Class shares to reflect the restructuring of Hughes Electronics. Until now, the H Class shares have represented a dividend interest in the earnings of all of Hughes's business lines. With the sale of the defence unit and the transfer of Delco to Delphi, Hughes Electronics will be left with its telecommunications and satellite businesses.

At the end of the process, GM hopes to leave behind the diversification strategies of various previous managements that at different times have had the company involved in numerous businesses, including data processing (it formerly owned Electronic Data Systems but spun it off to shareholders in 1996), electronics, defence, locomotives, heavy trucks and even refrigerators. Management wants the company to concentrate its resources on auto making.

As for the planned Delphi share sale, GM hadn't set a target date for the offering, although the company hadn't discouraged analysts' speculation that it would be made in the 1998 first quarter. As part of the reasons holding off the sale, the company now says regulatory approval for the Raytheon transaction has taken longer than expected. GM officials expect to receive federal approvals sometime in the fourth quarter.

'If we get [the approval], we would proceed to close the Hughes transaction and to move Delco to Delphi,' GM Chairman John F. Smith Jr. said recently. 'What is important is that we make that integration work, that we get focused on what Delphi is all about . . . After that is done, we will consider the possibility of a partial spin-off.'

Rebecca Blumenstein, The Wall Street Journal, Detroit

[09] Credit Foncier net profit falls 28% in first half

Foncier said that it expects net banking income to decline for the year but that the fall would be limited by the positive effects of the company's restructuring plan. In the half, net banking income fell to 2.06 billion francs from 2.25 billion francs a year earlier.

The restructuring plan, which includes voluntary retirement packages and attrition to reduce the number of employees, began in 1996 after the company's sharp 1995 loss.

Excluding exceptional items, the company's net profit fell to 295 million francs from 307 million francs the year earlier.

The French government had planned a bail-out for the lender that included selling some assets and transferring others to a new institution. That plan was cancelled after the employees staged a sit-in at the bank's headquarters for more than a week. The lender had posted a loss of nearly 11 billion francs in 1995 before swinging into the black in 1996.

During the second-half of 1997, earnings will include capital gains from the sale of some real estate in July 1997, Credit Foncier said.

The lender also said that it was working on a five-year strategy plan.

[10] Artemis plans to keeps Worms' Athena insurance unit intact

'It is not envisaged that (Artemis) would proceed with the sale of core assets in Athena, except in course of the current management of the group,' Artemis said in a statement published by its advisers in French press.

Depending on a review of the assets and any opportunities the market may present 'the agro-food sector and financial services are at this stage considered as strategic'.

Speculation around the bid had included a view that Artemis would seek to spin off Athena, in which Worms owns a 99.69 percent stake. Its agro-food holdings include Generale Sucriere (99.74%) and Danone (3.82%).

[11] Orkla earnings rise 34% to $320 million in the first eight months, beating market expectations

The Norwegian food and beverage-based conglomerate beat market expectations and booked a 28% rise in operating profits also.

Orkla attributed the rise mainly to a favourable trend in the consumer goods area.

The company posted operating profits of 1.80 billion crowns ($252.5 million) for the year to August 31 10% higher than consensus expectations, while earnings per share for the period rose 30% to 33.50 crowns.

The Oslo-based group, whose interests also include media and chemicals, said an 18% increase in operating revenues to 20.17 billion crowns resulted primarily from the acquisition of the outstanding 55% stake in brewery Pripps Ringnes from Sweden's Volvo.

Overall Orkla Beverages recorded operating profits of 638 million crowns, which adjusted for new business and exchange rate fluctuations, showed underlying growth of 20%.

Orkla attributed the profit rise to higher earnings from Eastern Europe and a warm Scandinavian summer. Orkla's Eastern Europe business, the 50/50 joint venture with Finland's Hartwall , Baltic Beverages Holding, added 320 million Swedish crowns to operating profits against 111 million Swedish crowns, mainly due to strong volume growth. The company's gains from securities sales rose to 611 million kroner in the first eight months of the year compared with 580 million kroner in the like period in 1996.

[12] WorldCom's surprise MCI bid turns industry on its head

Scrappy upstart WorldCom, unknown to most consumers, yesterday made a breathtaking and entirely unsolicited bid to acquire MCI Communications Corp., a company more than three times its size. The offer, valued at $30 billion, would be the largest takeover in U.S. history and would tear apart MCI's pending marriage to its reluctant overseas partner, British Telecom.

WorldCom's offer is so audacious and unexpected that, in a single swipe, the Jackson, Mississippi, firm -- a distant fourth among U.S. long-distance carriers -- is turning the global telecommunications industry upside down. If successful, the acquisition would catapult WorldCom into the ranks of telecom titans and give it an unmatched array of network assets in long- distance, local and Internet services.

Now BT faces a Hobson's choice: It could defy its big shareholders and pony up for an even larger bid, which is an unlikely scenario, or try to unravel its MCI alliance and search for a new global partner. For their part, investors seem pleased that the BT-MCI alliance may end: BT shares ended the day up 8% on the London Stock exchange at 445 pence a share.

If Worldcom is successful, the acquisition would grant the company control over an impressive chunk of the world's Internet traffic, a prospect that sparked cries of protest from rivals. Federal authorities will scrutinise the antitrust implications of the Internet and long-distance phone elements of WorldCom's offer.

Moreover, the combination could pierce the notion of cross-border globalisation that has been the driving rationale of the BT-MCI deal. WorldCom is building many of its own international lines itself, already laying undersea trans-Atlantic Fiber-optic cables and building local networks overseas, even as it bets that the U.S. market, the world's largest, is the place to be.

But the proposed transaction could strain WorldCom management and test the limits of a soaring stock market that has funded WorldCom's extraordinary acquisition binge: five big deals valued at almost $20 billion combined in just the past three years. That includes a separate pact unveiled yesterday to acquire Brooks Fiber Properties Inc. of St. Louis, which has Fiber-optic networks in 33 cities, for $2.4 billion in stock.

Regardless of whether it succeeds, WorldCom's bid is a humbling turn for British Telecom, which holds a 20% stake in MCI and agreed last year to acquire the rest. Just a few weeks ago, BT, under shareholder pressure, won a 25% reduction in its MCI purchase price, to $30 a share from $40. BT argued that its original offer was too generous, especially in light of a recent slide in the Washington carrier's long-distance business and projected widening losses from MCI's effort to enter the U.S. local phone market.

The magnitude of WorldCom's bid for MCI has been highlighted by the positive reverberations in telecoms stocks around the world.

One beneficiary has been France Telecom who has seen its price boosted on the grey market before its float. But while the WorldCom bid has a slightly positive effect in the short term, the long-term impact on France Telecom is less clear. Shares in France Telecom, in which a 20% to 25% stake will be floated later this month, were quoted at 207-209 francs in the grey market.

'The WorldCom bid has given a shot in the arm to all telecoms stock and is also helping France Telecom,' said a French broker active on the grey market.

France Telecom, Deutsche Telekom and Sprint of the US are linked in the Global One alliance, a rival on the global business telecoms services market of AT & T's Worldpartners and the MCI-British Telecoms link.

If the WorldCom offer for MCI succeeds, it would dwarf Global One in the United States. But if the merger broke the MCI link with BT, Global One would have better coverage of two key European telecoms markets, France and Germany.

Steven Lipin and John J. Keller, The Wall Street Journal, New York

[13] Russian consumer prices fall for second consecutive month

The figures are further evidence to the authorities, who on yesterday announced a cut in interest rates to near record lows, that inflationary pressures in the economy are subdued.

Excluding fruit and vegetables, however, the consumer price index rose 0.1%, it said. The committee did not provide year-on-year data for September inflation.

The annual rise in August was 14.7%, and September's fall in monthly prices means the September year-on-year increase will fall to a record low. The government is now forecasting inflation over the whole year of 12-14%, slowing to 5-8% in 1998.

The fall from hyper-inflationary levels in 1993, together with the stabilisation of the rouble over the last two years, is one of the government's main achievements.

The low inflation figures continue to meet scepticism among ordinary Russians who argue that the figures simply reflect the reduced purchasing power of the population, many of whom have not been paid for months.

[14] Marriott plans to beef up its international hotel chain

J. Willard Marriott, Jr. told Dow Jones that combining its food and management service operations with Sodexho, in a deal announced Wednesday, will free up the hotel giant to extend its empire outside the U.S.

'Our shopping list would probably include more international opportunities than domestic,' said Marriott, noting that the chain already has about 1, 200 U.S. hotels. 'I think we would be more aggressive and more interested in pursuing international opportunities. What our competitors seem to be doing is focusing on domestic opportunities.'

Marriott will unload $1.45 billion in debt as part of the transaction, which will close in early 1998. For tax reasons, Marriott will spin off its lodging operations into a new company with the same name, trading symbol and senior management as Marriott International has now. The stub, or remaining company of the spin-off, would consist of Marriott's food, maintenance and janitorial services operations.

Along with enabling Marriott to unload substantial debt, Sodexho is paying Marriott more than $300 million as part of the joint venture. In the chief executive's view, the deal 'increases our debt capacity tremendously.'

'There's a lot of consolidation going on in the industry and we hope to continue to participate in that,' said Marriott, who is in Asia to look over some of the properties acquired in the $1 billion purchase of Renaissance Hotel Group earlier this year.

That deal added Renaissance, New World and Ramada International to Marriott's existing stable of brands, which also includes Ritz-Carlton, Courtyard and Fairfield along with the Marriott name.

'With acquisition of Renaissance, we got an awful lot of three-star hotels, ' said Marriott. ' The question is how we're going to brand them.'

Among other things, he noted that 'we haven't really decided yet how strong we want to make the Ramada brand around the world.'

That said, he maintains that Asia will continue to be a priority for expansion within the company, despite currency woes and other problems now plaguing the region.

'Every economy has ups and downs,' he said. 'I've been going through ups and downs for 40 years in this business - and the Asian ups and downs seem to be quicker. You seem to hit puddles and just keep on going. For us, Asia is a long-term play.'

What's more, Marriott insists that the company's flagship J.W. Marriott Hotel in Hong Kong remains profitable, despite plunging visitor arrivals to the city. 'We're going to make as much money here as we did last year,' he said. 'Business is pretty good and we've been watching our costs, so our profits will be the same.'

Diane Brady, Dow Jones Newswires, Tokyo

[15] Promodes runs ad hoping to sway Casino shareholders to accept bid

The advertisement follows the rejection late Wednesday by the Casino board of Promodes' revised hostile bid, and its recommendation shareholders accept the Rallye offer.

In the advertisement, Promodes urges Casino shareholders to recognise its offer is based on a 'strategic link-up' between the two groups. Rallye's offer, Promodes says, makes no pretence of a strategic link-up and 'thus can only artificially value Casino at the same level as Promodes.'

The advertisement promises Promodes won't cut any jobs at Casino's headquarters in Saint-Etienne and repeats Promodes Chairman Paul-Louis Halley's offer to Casino's major shareholders that a seat would be available to them on the board of the merged entity.

Promodes made an initial cash bid for Casino Sept. 1 which was rejected on the grounds it didn't fully reflect the company's value and growth potential. Last Thursday, Promodes raised its cash bid to 375 French francs ($63.55) from 340 francs.

Rallye, Casino's largest shareholder, launched a white-knight bid for Casino on Sept. 12, offering Casino shareholders a mix of cash and bonds convertible into both shares and cash.

The Guichards, the heirs of Casino's founding family who still hold a major stake in Casino, are scheduled to meet in Saint-Etienne Saturday to weigh the merits of the two offers.

A local newspaper reported Thursday Casino trade unions have backed the Rallye takeover and will stage a demonstration to protest Promodes's attempted takeover of the company Oct. 21 in Saint-Etienne.

[16] Corporate and Economic Briefs

Denmark's August seasonally-adjusted unemployment rate was 8% of the work force, slightly down from 8.2% in July, Danmarks Statistik, the Danish national statistics agency, said. This brought the number of jobless in August to 221,200, down from 226,200 in revised data for July. The August data was in line with market expectations.

Norway's seasonally-adjusted industrial production index fell 4.6% in August from July, bringing the year-on-year increase to 1.4%, Statistics Norway, the Norwegian national statistics agency said.

The Hungarian unemployment rate fell to 10.3% in September from 10.4% in August, the Ministry of Labor announced. The total number of registered unemployed was 458,600 at the end of September, down from 463,000 in August, the ministry said in a news statement. In September 1996 the unemployment rate was 11.0%.

Rover Group said it expects to sell 50,000 and 60,000 of its new Freelander four-wheel-drive vehicles in 1998. Rover managing director Ian Robertson said the group's dealerships already have received 10,000 deposits from interested buyers, who haven't even seen the vehicle yet. The model is scheduled for launch Jan. 1. Rover, a unit of Germany's BMW, is gearing up production in December to two shifts from one operating currently. That will require it to hire an extra 300 workers at its factory in Solihull, England.

Construction output in Great Britain fell a seasonally adjusted 7% by volume in the three months through August from the three months through May, but was up 3% from the June-August quarter of 1996. The Department of the Environment (DOE) reported that the fall in June-August from March-May was due mainly to declines in the public housing and private commercial sectors, which fell 47% and 17% respectively.

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