Bock hoists the For Sale sign

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The Independent Online
Compared to his buccaneering predecessor at Lonrho, Dieter Bock comes across as earnest to the point of tedium. For a man who has made serious amounts of money from the German property market, he is also surprisingly shy and retiring. If he carries on in his current vein, however, Tiny Rowland's faithful band of shareholder followers, who were outraged by his ousting, are going to have a great deal to thank their unassuming new boss for - he is showing reassuring signs of doing something sensible with the sprawling empire he has inherited.

The deal announced yesterday, ostensibly a 50/50 merger with Gencor, in effect gives up control of Lonrho's South African private platinum interests in exchange for a tradeable stake in a quoted company, Impala. It is a first step along a path that should narrow the yawning gap between Lonrho's share price, 154.5p, and analysts' calculations of the underlying worth of the company's businesses, which might be as much as 230p.

If there were ever any doubt about Mr Bock's lack of commitment to the South African interests, and perhaps to all the African operations, Tiny's first love, it is clear now. Putting a quoted value on Lonrho's interest is surely a first stage in a disposal process whatever the company might say about economies of scale and efficiences. As with the Ashanti mines, the For Sale sign has now been hoisted.

Not that there aren't real commercial benefits to be had. Eastern and Western Platinum are in Lonrho's books at pounds 350m compared with the implied value of its stake in Impala of pounds 430m. If stripping out duplicated costs can persuade the market to value the business as highly as its bigger rival, Rustenberg, Lonrho's stake will be worth nearer pounds 600m.

It is early days yet for the new order, and Mr Bock still faces an uphill struggle to tempt investors back into what became a pariah stock in the dying days of Tiny's reign. Lonrho is still leaking cash at an alarming rate, the poor geographic balance means ACT is a perennial worry, interest cover is low and the wait for the mooted flotation of the hotels could be a long one.

But Mr Bock has every incentive to unlock some of the hidden value in the company. Every penny added to the share price increases the value of the Lonrho's chief executive's stake in the company by pounds 1.9m. Yesterday's 6p rise on the back of the Impala deal was worth over pounds 11m to him. Tiny Rowland, who still has 50 million shares, also has a vested interest in swallowing his pride and letting the new team get on with the good work. Though he hates what is happening, it seems to be good for his wealth.

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