Amstrad and Kleinwort in divorce

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AMSTRAD, the consumer electronics company controlled by Alan Sugar, has parted company from its adviser Kleinwort Benson, the merchant bank, writes Neil Thapar.

The move marks the end of an unbroken 20-year connection between Amstrad and the bank, which sponsored the company's flotation in 1980.

The divorce came to light last week, when Amstrad appointed Morgan Grenfell as its adviser for the pounds 60m acquisition of Viglen, the direct-sales computer company.

Last year Kleinwort was heavily criticised by Amstrad shareholders after it recommended a controversial 30p-a- share offer from Mr Sugar to take the company private. But the plan was defeated by an unprecedented grassroots rebellion by small shareholders who felt the offer seriously undervalued the company's net assets.

Much of the blame for the plan was aimed at the merchant bank, which was forced to admit at Amstrad's shareholder meeting that it would have received substantial fees had the deal succeeded.