Charter buys back Minorco's 36% stake

CHARTER Consolidated, the UK industrial holding company, is to sever its last links with Harry Oppenheimer's Anglo American-De Beers mining empire by buying back a long- standing 36 per cent stake held in it by Minorco for pounds 235.5m.

The purchase of the stake from the Luxembourg-based Minorco, which is controlled by Oppenheimer family interests through holdings by Anglo and De Beers, is the second leg of a deal set in motion in February.

At the time Charter sold a 38.3 per cent stake in Johnson Matthey, the world's biggest platinum marketing group, for pounds 342m to a company owned jointly by Minorco and its Anglo stablemate Johannesburg Consolidated Investment.

Jeffrey Herbert, Charter's chief executive, said that the buy-back would remove a question mark that had been hanging over the Minorco holding since the JM sale.

Charter's ambitions to expand had been hampered by the presence of a single dominant shareholder and led to a perception among investors that Charter was not a normal company.

'It is a great day for Charter. The deal ends speculation about the shareholding, makes us master of our own destinies and enhances our earnings by around 10 per cent,' he said.

Under a scheme of arrangement Charter Consolidated's shareholders, other than Minorco, will receive shares in a new company called Charter.

Instead of shares Minorco will be paid pounds 235.5m in loan notes, valuing its holding at 622p a share or a 1.9 per cent discount on Tuesday's mid- market price of 634p. Charter shares rose 15p to 649p.

Three Minorco nominee directors will be leaving the Charter board once the scheme is approved by Charter shareholders. Sir Michael Edwardes, non-executive chairman of Charter, will also give up his seat on the Minorco board.

News of the Minorco deal accompanied Charter's results for the year to 31 March, which showed pre-tax profits of pounds 289.2m including a pounds 217.8m profit from the sale of its JM stake. Excluding exceptional items pre-tax profits fell by 3 per cent to pounds 71.7m and earnings were unchanged at 42.5p. A final dividend of 15p lifts the year's total by 2.3 per cent to 22p.

Bottom Line, page 33

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