Barclays talks on 135 BMPS Italy branches-sources

LONDON/MILAN, Oct 15 (Reuters) - Britain's Barclays is in talks to buy 135 Italian branches from Banca Monte dei Paschi di Siena, people familiar with the matter said, in a deal that could be worth 540 million euros ($804.8 million).

Barclays is offering to pay 4 million euros a branch, one of the sources said.

The offer is an increase from its previous 3 million euros each, but BMPS has been firm on 5 million, Italian business daily Il Sole reported.

The bank is due to meet BMPS in Siena with consultant Morgan Stanley in the next few days, possibly on Thursday, Il Sole said.

A deal is not imminent and the UK bank is also in talks to buy branches from other banks to build up its Italian presence, one of the sources said on Thursday.

Barclays is expanding in western Europe, and has targeted northern Italy as a key growth area.

BMPS and Barclays declined to comment.

BMPS, which is the oldest bank in the world, it must sell 150 of its branches by mid-December as a condition from Italy's antitrust authority for its Antonveneta acquisition. So far it has sold only 15 outlets at 5 million euros each.

Sources said in June that Italy's bank Intesa Sanpaolo was in talks to buy 50 of the BMPS branches for a total of between 125 million to 150 million euros.

Barclays is also interested in acquiring Banco Popolare's retail units Popolare Cremona, Popolare Crema and Cassa Pescara, and its merchant bank Efibanca, Il Sole said.

A spokesman for Banco Popolare said the bank has previously said Efibanca is non-strategic but has not commented on the other possible sales. He declined further comment.

A Milan-based bank analyst said BMPS has always wanted 5 million euros per branch. He said other banks might be interested, including Deutsche Bank, while valuation partly depends on the location of the branches in the country.

Barclays currently has 256 distribution outlets in Italy, including about 150 branches, up from 49 in mid-2007. ($1=.6710 Euro).

Free samples of snacks a common marketing tool in Japan

TOKYO : In Japan and many countries around the world, it is common to receive free samples of snacks or cosmetics. They are a marketing tool to entice people to buy the actual thing.

The cost has not stopped a Japanese snack manufacturer from going all out to encourage potential customers.

Harimayama - a rice cracker maker based in Hyogo Prefecture - has shops in Fukuoka and Kyoto and has opened its third shop in Tokyo. As part of a promotion, it has been offering its customers rice crackers free of charge, together with coffee and tea.

One customer said: "I love it. I walked around the area for the first time. I came from Gunma and came by for the first time."

Another said: "I think many customers who come here will purchase them as gifts. (I will buy them) for my mother."

The popularity of this latest shop in Tokyo has even surprised its owner. About 1,500 to 2,000 customers enjoy the freebie everyday.

One tonne of rice crackers are served during the first month of opening. But the store said it has increased sales by 50 per cent due to the prime location of the store.

Keisuke Kawamura, manager, Harimaya Station Tokyo Kasumigaseki, said: "We supply the rice crackers and the customers buy directly from us. There is no middleman. For that reason, we can use quality ingredients, make good products, and can provide them at a reduced price. At the same time, we can return our gratitude."

While the promotion may work with some customers, more effort will be needed to attract others.

One customer said: "Rather than eating rice crackers, I would prefer to buy other stuff."

For Harimayama, the conquest of this final sector will establish its dominance of the rice cracker market.

A turnaround flight on Garuda Indonesia

Five years ago, Garuda Indonesia was an airline that seemed to be on a path of constant turbulence. It was losing money year after year, battling allegations of corruption within the state-owned enterprise and stained with a questionable safety record. Today, Garuda is a symbol of what’s possible in the difficult airline industry. You need a leader with focus.

Emirsyah Satar, 50, is the CEO of Garuda. Now in his fifth year as the head of the national airline, he has turned Garuda from problematic to profitable through staged planning. “In the first two years, just surviving was good enough. And then the next two years was the turnaround stage,” he said. Now the airline is embarking on the growth stage.

The son of an Indonesian diplomat who grew up in Mexico City and Prague, Satar went on to become a banker and then the CEO of Bank Danamon, Indonesia’s fifth largest bank. In 2005, he was brought to Garuda as President and CEO and he made drastic changes from the start.

“What happened in 2005, the business model was just not working,” Satar said. It increased accountability at all levels in the organization. And in the short term, Satar decided less was more: “We got out of routes where we were losing money … it was ok if we reduced our market so we could become profitable again.”

He positioned Garuda as a “premium airline” and told his staff not to worry about local competition. With a domestic population of 240 million people, he bet focus on the cream of the crop would keep Garuda afloat while it restructured. His bet paid off, in part because Indonesia sidestepped the brunt of the global downturn thanks to the strength of its domestic market: Indonesia’s economy is still growing at around 4 percent.

While Garuda is still juggling $700 million in debt, the state-owned enterprise has been able to turn a profit the past two years. Satar has plans to make what he calls a “quantum leap.” By 2014, he wants to bring the fleet from the current 66 to 116 aircraft.

The big challenge now is getting a stalled IPO back on track. Satar had wanted to bring Garuda public this year, but the global downturn put a halt to that. Now he’s shooting for an IPO for June 2010. The airline is also in the process of restructuring its debt, which Satar hopes to have completed by the end of this month.

Then there was the issue of safety. In the past decade, a string of crashes involving various Indonesian airlines eroded the public trust in Indonesian air safety. In March 2007, a Garuda plane overshot a runway in Yogyakarta and crashed, killing 21 people. In June 2007, the European Union banned all Indonesian airlines in European airspace. Satar hired an American consultant and and cracked down on safety issues. In July of this year, the EU lifted the ban on certain airlines included Garuda.

The airline now plans to get into the long-haul market, starting with an Indonesia-Amsterdam route by June 2010. That will be followed by routes to Frankfurt, London, Paris, Rome and eventually in 2012, Los Angeles.

“We (Garuda) travel to Australia, Japan, Korea, China and these people still travel. And Bali is still a good attraction,” Satar said.

Ford recall hits 4.5 million vehicles

NEW YORK (CNNMoney.com) -- Ford issued the largest single recall in its history Tuesday as drivers of an additional 4.5 million vehicles were alerted about a fire hazard from a faulty switch.

The National Highway Traffic Safety Administration said this was the eighth recall, involving a total of 16 million Ford Motor (F, Fortune 500) vehicles, concerning the cruise control deactivation switch manufactured by Texas Instruments (TXN, Fortune 500).

The faulty switch can leak hydraulic fluid, overheat, smoke and then burn, and risks causing a fire even when the ignition is turned off, parked and unattended, the NHTSA said.

The risk is elevated for 1.1 million Windstars that were subject to a government investigation, said Ford spokesman Wes Sherwood.

"We determined with the government that there is a low risk of fires for those vehicles," Sherwood said. "The other 3.4 million vehicles are the remaining vehicles that have the Texas Instrument switch, so we're recalling them to reassure customers and prevent future recalls."

Sherwood added that Ford has always gone beyond recalling only the cars that present a risk.

While the company does not discuss its current suppliers, Sherwood said that Ford vehicles did not use the Texas Instrument switch in post-2003 models.

NHTSA said Ford drivers should look for warnings of possible imminent fires, including malfunctioning cruise control systems and brake lights and antilock braking system and brake light warnings on the dashboard. The safety agency also said difficulty in getting the vehicle out of the park mode should be treated as a warning.

"I urge customers to pay attention to this warning and bring the affected models in to have them repaired as soon as possible," said Transportation Secretary Ray LaHood, in a statement.

Planned law changes criticised

The cabinet yesterday approved changes to environmental legislation despite claims by activists that they would do little to solve the problems associated with the Map Ta Phut industrial estate.

Prime Minister Abhisit Vejjajiva said Section 51 of the National Environment Act 1992 would be amended so project operators must also conduct health-impact assessments (HIA) and hold public hearings, as well as environmental-impact assessments (EIA).

The draft amendments were intended to meet the requirements under Section 67 of the 2007 Constitution, he said.

Section 67 requires public hearings for projects seen as harmful to the environment and public health. It requires the government to set up an independent agency to advise on such projects. That agency has not been set up yet.

The changes will be forwarded to the National Environment Committee within three weeks and later to Parliament for approval. The government will issue interim regulations in the next two to three weeks, said the premier.

The draft amendments prepared by the Council of State state that the Natural Resources and Environment Ministry must publicise projects that may have harmful effects on communities.

Impact assessments are required to cover the potential effects not only on the environment and natural resources but also on public health in the community, and a public participation process will be mandatory.

The Environment Committee is also required to appoint experts on the environment, natural resources and public health to take part in the impact analysis.

The National Environment Office is required to send impact analysis reports to existing independent organisations on the environment that have registered with the Natural Resources and Environment Ministry. The independent organisations must complete their suggestions within 90 days and later propose them to the cabinet for approval.

If the organisations reject the proposals, the National Environment Office would be required to prepare a revised report and again ask for suggestions from independent organisations.

The Administrative Court on Sept 29 halted 76 government-approved projects after environmental groups filed a complaint that the pollution would hurt the public, and that Section 67 prohibited their approval. The government is appealing the decision.