If we did make a bid we would have to increase Cunard’s market share and cut costs

If we did make a bid we would have to increase Cunard’s market share and cut costs.”. “No one else is going to march in and buy this.”A spokesman for P&O said that while the company’s chairman, Lord Sterling, had said last week that it “would be prepared to look at it [Cunard], at a price”, this should not be interpreted to mean it was ready to make an offer.”We haven’t been approached by anyone We would have to look pretty carefully at the price But we wouldn’t dismiss it out of hand. It is not in the interests of Trafalgar’s shareholders for the company to be cherry-picked in any way whatever.”A spokesman for Kvaerner said that it was “still working on whether to go ahead with a bid”. He stressed that there was no time pressure on Kvaerner to come up with an offer. Its fleet is seen as under-invested and out of date, with last year’s humiliating QE2 fiasco still fresh in people’s minds.Both companies’ merchant- bank advisers continued intensive talks over the weekend – Brian Keelan of SBC Warburg for Kvaerner and John Reynolds of Schroders for Trafalgar.It is understood that Kvaerner has been in close talks with HongKong Land, the Keswick-owned company which holds a key 26 cent in Trafalgar.According to one source, the UK company is prepared to consider “nothing but a bid for the company.

Cunard may not, however, be the stumbling block that some analysts have suggested, according to sources yesterday.Potential buyers for Cunard suggested by City sources over the weekend included P&O, Disney, the American entertainment giant, and shipping companies Carnival and Royal Caribbean.One analyst, however, described such speculation as “complete rubbish”.None of the names put forward were prepared to confirm that they were definitely interested, still less that they had been involved in any preliminary talks. A spokesman for Kvaerner denied that Cunard had become a stumbling block but admitted that it “did not fit with Kvaerner’s core strategy”.Cunard lost pounds 134m last year out of a total loss for Trafalgar of pounds 321m. Kvaerner stressed that it was at no time under pressure to come up with a formal offer.While neither side was prepared to say anything, City observers assumed the bid would be around the 50p-55p level, valuing Trafalgar at around pounds 900m.Weekend press reports dwelt on Kvaerner’s reluctance to take over Trafalgar’s non engineering operations, particularly the loss-making Cunard cruise- shipping line. JOHN WILLCOCK

Kvaerner, the Norwegian shipping and engineering group, is close to making an agreed bid for Trafalgar House, the loss-making company, after bid talks made progress over the weekend.
Sources close to Trafalgar insisted yesterday it would agree to nothing less than a bid for the whole company.

A cinema is also part of plans to redevelop the King’s Cross, London, site near the proposed Channel Tunnel link rail station.. It is in talks with CinVen, the venture capital group, and a deal priced at about pounds 70m could be reached soon.The proceeds would accelerate plans to open new multiplexes across the UK. A Virgin Cinema has now been opened in Dublin, and there are plans to open a greenfield property in Rochester, Kent, this summer, incorporating a cinema, restaurant and games centre. The company intends to sell the bulk of the single-screen MGM sites, perhaps as many as 80, in order to concentrate on the higher-margin multiplex end of the market. Virgin is believed to be one of two companies still in the running for the range of book publishing imprints, including Secker & Warburg and Methuen, which could fetch between pounds 80m and pounds 100m.

The other bidder is Electra, the venture capital group.Mr Devereux’s latest acquisition, the 120-strong MGM cinema chain for which it paid pounds 190m last year, is now being redeveloped and rebranded. Sky is currently conducting a review of its multi-channel package, consisting of 28 themed channels such as Sky Sports, Playboy and Sky Movies, and is believed to be looking for additional products.Virgin is also in talks with Reed-Elsevier, the Anglo-Dutch publishing giant, over the purchase of Reed Consumer Books, being sold as part of Reed’s strategic shift toward electronic and professional publishing. On the TV side, he is seconded by Jeremy Fox, who is now in preliminary talks with other broadcasters about the prospects for developing a branded Virgin TV channel on cable or satellite.It is understood that informal discussions have taken place between Virgin and BSkyB, the satellite broadcaster owned 40 per cent by Rupert Murdoch. It is believed to be in early talks with joint venture partners in Spain, France, Italy and Germany, with the aim of extending the successful pop-rock-talk mix beyond Britain.The radio push is part of a broader expansion into media, including CD- Rom publishing, television and books. The station will be rebranded as Virgin.Mr Branson’s company currently operates two radio licences in the UK, and is looking at expanding on the Continent.

MATHEW HORSMAN

Media Editor
Richard Branson’s Virgin Group is poised to launch its soft rock commercial radio format in Dublin, following a preliminary agreement to invest in FM104, the Irish radio station.The move marks the further development of Virgin’s media expansion plans, in the wake of its failure to win the Channel 5 licence.The radio deal, to be announced this week, will see Virgin take a 27 per cent stake in the privately held station, and assume management responsibilities. It could also become a contentious issue if, as some expect, British Gas decides to back out of public gas supply by selling off operations in different parts of the country.Mr Caborn is worried that foreign-owned companies will exploit weaknesses in the UK regulatory system by consolidating accounts and cross-subsidising other parts of their group from the profitable utilities businesses which serve the public.Apart from continuing speculation over Yorkshire Electricity, the industry is also awaiting the outcome of inquiries by the Monopolies and Mergers Commission into the proposed pounds 2.8bn takeover by National Power of Southern Electric and PowerGen’s desire to buy Midlands Electricity for pounds 1.9bn.. The Government bowed to his advice in the recent takeover of Northumbrian Water by Lyonnaise des Eaux of France, demanding that the French group list all its UK water interests separately on the Stock Exchange by 2005.However Mr Caborn is thought to be concerned about the electricity industry, where the watchdog, Professor Stephen Littlechild, has chosen not to go down that route. Eastern Electricity, one of the largest regional firms, was absorbed into Hanson and South Western Electricity was taken over by Southern Electric International of the US.