Anglo buys out Bock for pounds 257m

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The Independent Online
Dieter Bock yesterday sold his 18.3 per cent stake in Lonrho to the South African conglomerate Anglo-American for pounds 257m and announced that he is standing down as chief executive of the mining to hotels group ahead of its forthcoming demerger.

The announcement marks the end of another chapter in Lonrho's colourful history which began when the German financier bought his stake four years ago and then proceeded to fight a bitter battle to oust its founder Tiny Rowland before unveiling plans to break up the business.

Mr Bock will be replaced as chief executive by Nicholas Morrell, previously Lonrho's deputy managing director, but will remain on the board as non- executive deputy chairman.

The sale of Mr Bock's stake to Anglo-American gives the South African mining and industrial giant a 26 per cent shareholding in Lonrho and de facto control of its mining interests when they are demerged from the African trading operations in the next three months.

Mr Bock meanwhile will be free to re-invest the profit made on the sale of his 18.3 per cent stake by becoming a big shareholder in the African trading business. One option will be for Mr Bock to acquire his shareholding in the trading business from Anglo-American.

Separately, Mr Bock said he expected to be able to announce the sale of Lonrho's Metropole and Princess hotels "shortly". The Metropole chain is set to be bought by rival hotel group Stakis while Prince Al Waleed of Saudi Arabia is said to be favourite to acquire the Princess Hotels business.

The two hotel sales should together raise about pounds 650m, enabling Lonrho to float its mining and trading businesses largely free of debt.

Julian Ogilvie Thomson, chairman of Anglo-American, said it did not intend to make an offer for the remainder of Lonrho's shares adding that its increased shareholding represented a long-term investment.

But he went on: "Over the long term Anglo-American looks forward to supporting and contributing to Lonrho's mining business."

He also said that Anglo had a good relationship with Ashanti Goldfields, the African gold producer in which Lonrho holds a 30 per cent stake, and hoped that there would be opportunities in the future to enhance that perhaps through partnerships in new ventures.

The German financier acquired his stake in December, 1992 for about pounds 135m. The sale to Anglo at 180p a share means he is showing a profit of about pounds 125m on the holding.

He became joint chief executive alongside Mr Rowland in February 1993 and for the next two years fought a boardroom battle with Lonrho's founder for control of the empire he created 40 years ago.

Mr Bock finally won the tussle in February, 1995 when it was announced that Mr Rowland was to step down from the company.

When he arrived at Lonrho the shares were languishing at 73p. Although they have lost nearly a third of their value in the last six months, they closed 4.5p up at 163.5p last night.

A Lonrho spokesman said that since Mr Bock intended to make a significant investment in the trading business when the demerger took place it was not appropriate that he should remain as chief executive in a position to help decide the structure and pricing of the flotation.

Apart from Lonrho's African sugar, agricultural and automotive distribution interests and some game lodges in Kenya, the trading division also encompasses the group's UK textile and printing business and the Dutton Forshaw and Jack Barclay car dealerships.

Anglo bought a 5.9 per cent stake in Lonrho in March, acquiring shares formerly owned by Mr Rowland and entered an agreement with Mr Bock giving it first right of refusal over his 18.3 per cent should he choose to sell in the next 18 months.