Bibby plans to demerge

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J BIBBY, the industrial and agricultural conglomerate, is to split itself into two independent companies in an ICI/Zeneca-style demerger.

The new company, comprising the paper, science and agricultural businesses, will be floated off separately on the stock market early next year.

Those divisions accounted for 48 per cent of the group's pounds 416m turnover and 52 per cent of the pounds 15m operating profits in the half- year to 27 March.

The new company will keep the Bibby name and the remaining half of the group will be renamed Stratford. Stratford will retain a 20 per cent stake in the newly floated entity.

The businesses left in Stratford will be materials handling and capital equipment.

Bibby is currently 79 per cent owned by Barlow Rand, the South African conglomerate. Barlow Rand itself announced plans to demerge into four independently operated companies in August.

Fuller details of the Bibby demerger will be announced with Bibby's annual results next month. A spokesman said that a number of issues, such as who would run the companies, had yet to be resolved, but that the company wanted to get the news out into the market before it leaked out.

Bibby's half-year profits were sharply down from pounds 17.3m to pounds 6.5m, following losses at its Spanish subsidiary, Finanzauto. Bibby bought the Spanish company for pounds 86m last year after a long drawn- out hostile bid. The interim dividend was cut 30 per cent to 2p.

Richard Mansell-Jones, Bibby's chairman, said the board decided that the future development of the group would be better served by the autonomy and independent access to capital available to two separate companies.

The market liked the news, marking Bibby shares up 7p to 92p.