200m pounds Exco flotation to treble value of Cayzer family stake

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The Independent Online
THE CAYZER shipping family is poised to treble the value of its 27.3 per cent investment in Exco, the money and securities broker, when the company is floated on the stock market in July with a value of more than pounds 200m.

Exco was bought by the collapsed British & Commonwealth group eight years ago. The float will raise 6.5p in the pound for B&C's creditors, bringing to an end administrators Ernst & Young's involvement with Exco.

Stephen Adamson, co-administrator, said he hoped to pay the money raised by the flotation to creditors by the end of August.

'We are pretty pleased with the outcome,' he said. 'We have realised pounds 1bn from the administration of B&C and already distributed pounds 650m to creditors.'

The Cayzer family sold B&C in the late 1980s to a City consortium managed by John Gunn. In 1990, B&C went into administration and two years later the administrators placed 60 per cent of Exco privately.

The 1992 deal valued the group at pounds 75m, and the Cayzers bought back 27.3 per cent of Exco via their family vehicle, Caledonia Investments.

The flotation will enable the administrators of B&C to realise their remaining 40 per cent holding in Exco, and will not raise any new money for the company.

The intentions of Exco's shareholders will be revealed in the listing document, expected next month. A total of 150 Exco employees own 15 per cent of the company, a stake now worth at least pounds 30m.

Exco has about 2,000 employees in 13 financial centres worldwide. It is divided into two main divisions, money and securities broking. The first provides foreign exchange and derviatives broking for international banks. The securities side deals in government debt, mainly in Britain, the US, Canada and Australia, as well as having a big Far East presence.

Ron Sandler, Exco's chief executive, admits the group has gone through a rough patch during the administration of its parent company, which coincided with the recession.

Analysts are impressed by Exco's recovery since the 1992 placing.

Turnover for 1993 was up 28 per cent to pounds 211.3m, and pre-tax profits rose 52 per cent to pounds 41.5m. The worst year was 1991 when Exco lost pounds 5.1m. Earnings per share were up to 36.81p last year from 24.34p.

This puts Exco on a historic price earnings ratio of roughly 9. The pathfinder prospectus will be published in mid-June and will contain a profits forecast for the half-year.

The sponsor to the issue is NM Rothschild and the broker will be Kleinwort Benson.

Mr Sandler said 1994 had begun satisfactorily for the the group, and the flotation would allow it to make further 'fill-in' acquisitions, such as the recent purchase of a Swiss derivatives broker. 'We are delighted to be returning to the stock market after an absence of eight years,' he said.

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