Since Ms Brown took over circulation is up 26 per cent and revenue is said to

Since Ms Brown took over, circulation is up 26 per cent and revenue is said to have risen, too. Yet it is rumoured that all that loud (and smelly) advertising is being sold at a heavy discount. Despite Ms Brown’s best efforts, the magazine is estimated to be losing at least $1m a month. The patient’s prognosis seems improved, then, but far from brilliant.. PENTOS, the retailing group that owns Dillons bookshops and Rymans stationers, was on the brink of collapse this weekend, after its bankers indicated that they would not increase its loan facilities.

The company is now understood to be in talks with several potential rescuers including Schroder Ventures, the venture capital arm of its merchant bank adviser Schroder, and Electra Investment Trust.
Candover Investments and Warburg Pincus, the corporate finance boutique that rescued the Amber Day discount chain, are also believed to be taking a look.The prospects for Pentos worsened on Friday after a meeting between Bill McGrath, the chief executive, and the company’s two main banks, Barclays and Midland.The banks indicated that they were not prepared to increase loan facilities to the group, which are due to expire on Tuesday. Pentos wants the existing £55m facilities rolled over and topped up by an extra £20m.Until last week, Pentos was confident the top-up would be forthcoming. According to one source close to the talks: “At the 59th minute, the banks started to play hardball.”However, the banks have not come up with a definitive no Talks are expected to go on until the Tuesday deadline. Sir Kit McMahon, chairman of Pentos, as a former head of the Midland Bank and a former deputy governor of the Bank of England, has considerable influence in banking circles.Pentos’s borrowings are rapidly rising as it stocks up after the post- Christmas sales and heads for quarterly rental payments due at the end of March.Unless the banks stump up, Pentos faces receivership, some kind of equity injection from a third party, or a trade sale. The US discount bookseller Barnes & Noble has been interested in the past.A rights issue looks impossible as the shares are languishing at 8p. Shareholders are still smarting after stumping up 25p a share for a previous emer-gency rights issue in March. Pentos also aroused controversy in December, when it ring-fenced its Athena poster chain and put it into receivership Athena debts were not honoured by the parent company.

This was a perfectly legal move, but one that sparked accusations of poor business ethics.Schroder is understood to be looking at various options for the company, which also owns an office furniture-making subsidiary. These range from a fresh equity injection to a rescue involving mezzanine finance.Dillons, which also owns Hatchards, is the second-largest bookseller after WH Smith, with 149 branches and annual sales of more than £140m.All parties agree that the business is worth much more as a going concern than if it were put into receivership. The shop leases would revert to landlords, while the stock is on sale or return and would be claimed back by publishers.Mr McGrath, recruited from Wickes a year ago, is regarded in the City as doing a good job. But he is handicapped by having no finance director, following the ousting of Clive Gregory.. GLAXO’S £9.2bn hostile takeover bid for the rival pharmaceuticals group Wellcome has been thrown into confusion by the surprise decision of the US competition watchdog, the Federal Trade Commission, to ask both companies for further information.

If the FTC decides that the bid violates the US Hart-Scott-Rodino anti- trust law, Glaxo may be forced to withdraw it. Any other bid by a leading pharmaceuticals manufacturer may be similarly outlawed.
A statement issued late on Friday night said: “Glaxo announces that it has today received a request for additional information from the FTC, in connection with the filing it made in accordance with the HSR Act on 26 January 1995, relating to its Final Offer for Wellcome. Such requests are not uncommon in transactions of this size and type and Glaxo will work actively to satisfy the FTC’s request as soon as possible.”It is not possible at present to determine whether the receipt of the information request will have any impact on the timetable of the Final Offer. Based upon publicly available information, Glaxo believes that the Final Offer does not violate the US anti-trust laws.”A spokesman for Glaxo added that the company had considered whether there might be any such violation before it launched its bid last month, and had been advised that it did not.A Wellcome source said that the FTC request it received related to Panorex, a new adjuvant treatment for colorectal cancer, and 311C, an anti-migraine drug.But Wellcome was careful to distance itself from any accusation of trying to sabotage the Glaxo bid.John Robb, Wellcome’s chairman and chief executive, said: “Wellcome has not sought in any way to frustrate the Glaxo offer by pushing an anti- trust defence. We continue to pursue our strategy of securing a better offer for all shareholders.”A further statement is expected from Wellcome tomorrow.The key clause in the Glaxo offer makes it conditional on “the expiry or early termination of all applicable waiting periods under the US HSR Act and all filings having been made and all waiting periods having expired or been terminated”.While it is far more common for the FTC to seek information than it is for it to actually block a bid, the agency’s late return to the fray raises doubts about the bid only 10 days before it is due to expire.And, as the two drug areas in question are the subject of considerable competition among leading pharmaceuticals groups, if the FTC does object to Glaxo taking over Wellcome it may make similar objections to any other bid for Wellcome.While that would have the effect of guaranteeing Wellcome’s independence, it would also have a devastating effect on its share price.The first final closing date of Glaxo’s offer is 8 March, but it is understood that this could be extended if the FTC needed more time to make up its mind.The combined Glaxo-Wellcome, while ranking as the world’s largest pharmaceuticals group, would have an overall market share of only 6 per cent.But the nature of the FTC’s inquiries make it plain that the US agency is concerned with anti-trust consequences of the merger in specific drug areas where the two companies have competing products.An industry observer pointed out that the anti-migraine overlap should not pose an insuperable problem, simply because there are so many other companies developing products to overcome that particular ailment.A Glaxo-Wellcome merger might have a more dramatic impact on the range of treatments available for colorectal cancer, as there are fewer manufacturers competing in that part of the market. Roche, Bristol-Myers and Pfizer are the main competitors, all of which are believed to have had discussions with Wellcome.But the emergence of the FTC as a factor in the battle for control of Wellcome, which both sides have suppressed until now, will come as a stern reminder to investors that even in the pharmaceuticals sector their calculations can be upset by unexpected foreign regulatory intervention.That danger could also deter the potential rival suitors that Mr Robb has been eager to encourage in the hope that one or more of them will produce higher offers than Glaxo’s.With Glaxo shares down 7p to 629p on Friday, the bid is worth £10.31. That is 20p higher than Wellcome’s market price, which was down 6p on the day..

HANSON, the acquisitive conglomerate that last week announced the demerger of part of its US operations, may launch its expected mega- bid as early as next month, writes William Kay. The UK group’s shareholders are due to meet in April to approve the demerger of US Industries. But sources close to Hanson pointed out yesterday that the company would not have to wait for that approval before mounting a bid.
“Any bids are going to have to be of a scale and size to give us a new division,” said Derek Bonham, the group’s chief executive. But he reacted angrily to the suggestion by an analyst, Chris Alexander at Lehman Brothers, that USI was a “dustbin trust”.”That is a ridiculous thing to say,” Mr Bonham snapped back. “There is a nucleus of terrific businesses in there, including Jacuzzi Whirlpools, Ames garden tools and Ertl toys. It’s going to be an important conglomerate in its own right.”. INSTITUTIONAL shareholders in The Telegraph, Conrad Black’s UK newspaper company, have warned they will not be sold short by the tycoon if he goes ahead with plans to take the company private.