News in brief

• It is reported that private equity firm Terra Firma has now dropped out of talks with French industrial group Suez to launch a £1.5bn counter-offer for waste management company Biffa. Earlier this month, Biffa’s board accepted a formal 350p a share offer valuing the company at £1.2bn from a private equity consortium comprising Montagu and Global Infrastructure Partners (GIP), an investment group backed by General Electric. It is now reported that this consortium has been declared the winner.

Baugur executive chairman Jon Asgeir Johannesson is studying three acquisitions and has set aside €1.3bn for purchases. Johannesson said that ideally he would prefer Baugur to target large companies. A source suggested that New York retailer Saks, in which the Icelandic investor has an 8.5% stake, could become Baugur’s distributor for UK brands. The Iceland retail investment group is also considering options for its 28.5% interest in UK retailer Moss Bros. Baugur owns stakes in 20 retailers with total sales of about €12.6bn.

Morgan Stanley Private Equity has been named as the preferred bidder for South Korea’s ailing Daewoo Electronics. Daewoo’s key creditor, Woori Bank, said Morgan Stanley Private Equity “scored the highest” following a review of proposals from bidders that included pricing and business plans.

The announcement came after creditors failed to reach an agreement with India’s Videocon Industries due to pricing differences. The consortium reportedly wanted a 13% discount to the initially agreed €465m price tag.

Woori said creditors plan to sign a memorandum of understanding with Morgan Stanley as soon as possible before a final deal, possibly in May, after due diligence and price negotiation. Creditors including state-run Korea Asset Management Corp, Shinhan Bank, Korea Exchange Bank and Woori Bank, and hold a combined 97.5% interest in Daewoo.

Daewoo Electronics is a former unit of Daewoo Group, which collapsed in 1999 with US$80bn in debt in one of the world’s largest corporate failures.

Ranked behind Samsung Electronics and LG Electronics in the domestic market, Daewoo Electronics posted a net loss of W188.6bn on revenues of W2.08trn for 2006. It produces a range of goods including TVs, air-conditioners and washing machines, with its extensive overseas sales networks seen as its key strong point.

British Energy chief executive Bill Coley is reported to have said that the company is considering options including a break-up. Rothschild is acting as the adviser to British Energy. The break-up proposal would involve splitting British Energy into one division that would construct nuclear power stations, and another that would operate the eight plants currently operated by British Energy.

The break-up plan is on the agenda for discussion at British Energy’s board meeting in March. The UK government, which controls a 39% stake in British Energy, is understood to be in favour of a break-up. Civil servants have in private voiced concern at British Energy owning eight of the most attractive nuclear power plants in the UK. They think breaking British Energy up would avoid giving the company undue influence in the construction of new nuclear reactors in the country.

It is believed that at least two buyout firms considered break-up bids for British Energy last autumn but the credit crunch forced them to abandon their plans. The company has a market capitalisation of £5.50bn (€7.3bn).