£300m hit for Yell after OFT move

MORE than £300m was wiped off the value of Yellow Pages directories group Yell today after the Office of Fair Trading referred the directories industry to the Competition Commission.

The OFT said a sevenmonth study had raised concerns that competition in the market, which is dominated by Yellow Pages and Thomson Local, was not working effectively. Despite new launches from BT and Trinity Mirror, it said, profits appeared to be high and there was limited competitive pressure on prices of adverts.

Yell has been forced to cut its prices for the last four years using the inflation minus 6% formula under a system inherited from when it was part of BT and faced a Monopolies Commission probe in 1996.

Analysts had thought the latest investigation might ease the controls. Yell shares plunged 48¾p to 420p.