Ashcroft expected to renew bid

Tory tycoon to make U-turn over troubled employment group
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The Independent Online
MICHAEL ASHCROFT, the Conservative Party Treasurer and controversial 1980s deal-maker, is this week expected to renew his interest in Corporate Services Group, the troubled employment company.

Mr Ashcroft's opportunistic bid is the latest in a series which have made the Belize-based tycoon a billionaire as well as one of the Tory party's most significant financial contributor.

New Carlisle, Mr Ashcroft's bid vehicle, last week asked the Takeover Panel for permission to withdraw its approach following the resignation of three CSG directors. New Carlisle's bid was tabled on condition that there were no changes to the CSG board.

However, one source close to the deal said: "I don't believe he will go away, whatever the Takeover Panel rules. After all, there is nothing to stop him coming back, even if the panel allows the bid to lapse. He knows a cheap stock when he sees one and the longer the ruling takes, the more vulnerable the company becomes."

The Takeover Panel is deciding whether the departure of the directors represents sufficient grounds for New Carlisle's bid to lapse.

Another source said: "The big issue at stake for the panel is whether it is right for a bidder to decide who sits on the board.

"It is very unusual for a decision to take this long."

Mr Ashcroft is said to be on holiday. His spokeswoman refused to comment on whether he was still interested in buying CSG.

The three CSG directors resigned after pressure from three shareholders, Mercury Asset Management, M&G and Schroders, who between them own about 32 per cent of CSG. The shares have slumped from a high of 240p a year ago to 83.5p on Friday.

CSG has called an extraordinary general meeting for 4 May, when shareholders will have the opportunity to vote on the appointment of three new directors proposed by Dresdner Kleinwort Benson, the bank representing CSG's institutional investors.

However, DKB is believed to have written to the London Stock Exchange asking for the meeting to be delayed amid signs that it has failed to gather sufficient shareholder support for its resolution to be carried. The stock exchange is thought to have rejected the request.

The three proposed directors are Michael Davies, chairman of National Express, Gilles Avenel, finance director of insurer Sun Life & Provincial, and Peter Button, a former DKB banker.

CSG's 1998 results are unlikely to be ready in time for the EGM.