Charter puts 38% stake in Johnson Matthey on sale

CHARTER Consolidated, the South African-backed industrial conglomerate, confirmed yesterday that its 38 per cent stake in Johnson Matthey, worth about pounds 364m, is for sale.

Charter said the shareholding in JM represented more than 50 per cent of its market value. The board had decided 'as a matter of principle' that it was in the best interests of its shareholders to realise the investment.

'Our strategy has been for some time to bring as much as possible of our asset base under our direct management control,' a company spokesman said.

'It is in the interests of both Charter and JM to resolve the issue as quickly as possible.' The sale could leave Charter with net cash of about pounds 460m.

Gordon Thorburn, administration director of Johnson Matthey, said he understood that Charter was having talks with one particular buyer, but he did not believe it was an existing shareholder.

The buyer would be acquiring less than 30 per cent of JM's share capital, he added. 'That would mean that a bid would not be accompanying that transaction. 'One certainly hopes and expects that if all that takes place is the sale of one substantial shareholding, it would not automatically be accompanied by a changed management.'

JM, whose profits edged ahead to pounds 66.4m last year despite lower metal prices and recession in Europe and the US, is the largest refiner of gold outside South Africa and the world's leading producer of autocatalysts.

It is also the world leader in selling and marketing platinum.

But JM's involvement in platinum is seen as an additional factor behind Charter's decision to sell. Minorco, the Anglo American offshoot, owns 35.8 per cent of Charter, but also holds 30 per cent of Engelhard, an American platinum group competing with JM.