Bottom Line: ADT should sever link

THE ANNOUNCEMENT yesterday of the terms of ADT's share and loan note offering in New York will seem exotic to the few UK-based shareholders left on the register. Not many deals over here are put together by the Bank of Nova Scotia.

For the record, 18 million shares are being offered at dollars 8 while dollars 250m of loan notes are paying 8.25 per cent and a further dollars 350m offer a 9.25 per cent coupon.

But then ADT cut its links with the UK long ago. It trades in the US, got a full listing on the New York exchange in 1991 and, having always declared its figures in dollars, now uses American accounting principles as well. Eighty per cent of its shareholders and the same proportion of share transactions are over the water.

That would not matter if the minority over here had not had such a rough ride over the past four years. For one thing, they have watched their shares fall from a high of pounds 21 to as low as 283p. They are currently 558p.

ADT is not alone in presenting its shareholders with ill-conceived investments, lawsuits from disgruntled investors and boardroom scraps. Other companies have issued optimistic convertible bonds and then had to go cap in hand to the banks to sort out the mess.

Quaint as the system may be, however, shareholders in the UK have always been given the option of maintaining the level of their disastrous investments thanks to the system of pre-emptive rights.

ADT's shareholders were not consulted about a placing that dilutes their holdings by 16 per cent. If the company does not want to play by the rules of the London stock market perhaps it would be better off severing the link completely.