Bock swaps banks for hotel flotation

Lonrho, the hotels-to-mining group undergoing a demerger initiated by its chief executive, Dieter Bock, is poised to appoint investment bank SBC Warburg as adviser for the flotation of its Princess Metropole Hotels division.

The move is being seen by banking sources as a slap in the face for Deutsche Morgan Grenfell, the blue-chip investment bank that Mr Bock brought in to advise him. Mr Bock's relationship with DMG sprang from his German nationality. In 1994, Mr Bock ousted chief executive Tiny Rowland, the group's creator, in a boardroom coup.

The relationship between Mr Bock and DMG is now seen to be under some strain. One adviser working on the demerger said: "DMG underestimated the complexities of the deal."

Lonrho is understood to be disappointed with progress after initial assurances from DMG that work would be completed by July. In January, Mr Bock announced Lonrho was looking to split its mining and non-mining assets into two separate listed companies, after DMG had said a demerger should be relatively straightforward. An announcement was expected in July.

But at the time of the interim results a fortnight ago, he backtracked to disclose a revised plan. Under this, the group will split into three parts: hotels, mining, and the African trading businesses, which will include Lonrho's other non-African trading operations.

Mr Bock said the demerger was behind schedule, chiefly for tax reasons. There are other factors. DMG has found that unravelling the different companies under the Lonrho umbrella, and their reporting arrangements to head office, is a far harder task than it had anticipated.

The first company to be spun off, Princess Metropole Hotels, owns hotel chains in the UK, US, and South America. To facilitate the deal, Lonrho has agreed to pay $389m (pounds 256m) to the Libyan Arab Foreign Investment Company for the latter's one third stake.

A deal is likely to raise between pounds 700m and pounds 900m for Lonrho.

DMG was also the group's adviser to the failed platinum merger between Lonrho's Western Platinum and Gencor's Impala Platinum. The deal was cancelled when the EU ruled it was unacceptable on competition grounds. Executives at DMG were unavailable for comment on Friday.

Start your day with The Independent, sign up for daily news emails
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific