Betterware founder set to net pounds 40m in mail order sale

Andrew Cohen, the Betterware founder, and his family will net more than pounds 40m from the sale of his mail order company to the group's management. The agreed pounds 117m deal closes the book on Betterware's colourful 13 years as a public company. But as our City Correspondent, Nigel Cope reports, even the final chapter is not without controversy.

Andrew Cohen said he would be sorry to part company with the business he bought for pounds 253,000 from the receivers in 1983 but that it was time to move on. "It is a good price. Also my parents [who own half of the family stake] are in their 70s."

Mr Cohen said he planned to devote more time to his property business which specialises in commercial property in the Midlands and South-east. He said he may bring the business, Andrew Linton Holdings (Linton is his middle name) to the stock market in the next few years.

A keen racehorse owner, he said he was more interested in selling some of his stable than buying more. "But I'm particularly interested in how Suny Bay will get on at Kempton Park on Boxing Day," he said. The horse is second favourite.

The offer by the group's managing director Peter Hartley and finance director Paul Turner is 110p per share in cash valuing Betterware at pounds 117m. The bid is financed by NatWest Equity Partners who said it was backing the management with a 3-5 year view, after which a flotation or trade sale would be considered.

Mr Cohen and his family currently control 47 per cent of Betterware. Under the terms of the deal, they will retain a 22 per cent stake in the new management company, Fenchurch Place but will have no management input. Fenchurch Place will be run by Peter Hartley, Betterware's managing director and Paul Turner finance director.

Mr Cohen denied that the deal could disadvantage smaller shareholders or that Betterware had been a disappointment on the stock market. City critics have said that the executive directors bidding for the company have had a conflict of interest. But Mr Cohen claims, "Small investors knew that the family had a big stake when they bought in. And I think it has been a very good performing stock."

After going public in 1986, Betterware became one of the best-performing shares on the market in the early 1990s when its shares rocketed from around 20p to more than 250p. The company specialised in household products such as tea strainers and loofahs sold from mini-catalogues door-to-door. However, Mr Cohen attracted criticism when he sold pounds 30m of shares in 1993 shortly before the company hit trading problems.

In 1994 it issued three profits warnings in five months and the shares crashed. It now has plans to expand into Eastern Europe.

Yesterday the shares closed 10.5p higher at 107.5p.