Charter sells Johnson Matthey stake for 342m pounds

CHARTER Consolidated, the industrial holding company, is selling its 38 per cent stake in Johnson Matthey, the platinum refiner, for about pounds 342m.

The move is part of a complex reshuffle within the giant South African Anglo American/De Beers mining empire, which, through its European arm, Minorco, owns 36 per cent of Charter.

After the sale Anglo will retain reduced links to Johnson Matthey but is widely expected to sever its connections with Charter.

The bulk of the Johnson Matthey stake, about 20 per cent of the company, has been jointly bought by Minorco and Johannesburg Consolidated Investment Company, a South Africa-based platinum producer in which Anglo has a 40 per cent holding, for pounds 187.8m or 490p a share.

JCI also owns 33 per cent of Rustenburg, the world's largest platinum producer, with which Johnson Matthey has a marketing agreement.

Minorco will contribute pounds 90.6m on completion. JCI is paying pounds 48.6m with the balance in three years. The stake will be held through a joint venture company to enable the groups to equity-account.

Minorco also owns 30 per cent of Johnson Matthey's main US competitor, Engelhard. It said yesterday that EC and American competition authorities had indicated they would not challenge the deal. 'They see it as a reduction in our overall holdings with 18 per cent going to the market,' Hank Slack, the chief executive, said.

The remaining 18 per cent of Johnson Matthey has been placed with a range of institutions, raising pounds 154.6m or 456p a share. The deal is subject to the approval of Charter shareholders, excluding Minorco, at an extraordinary meeting in March.

David Davies, Johnson Matthey's chairman, said he was very happy at the news. 'A 38 per cent stake is a bit of a time-bomb. If sold to a third party it could have been used to bid for the whole company,' he said. The market in the shares would also now be more liquid, he added.

The sale of the stake, which accounted for about half of Charter's pounds 690m market capitalisation, leaves the company with a number of industrial holdings and a large cash pile. It may buy at least part of Minorco's 36 per cent holding. Alternatively it may issue shares as part of any acquisition in order to dilute Minorco's stake.

Jeffrey Herbert, Charter's chief executive, said: 'It is something I have seen people suggest, but at the end of the day it has to be in my shareholders' interests.'

Shares in Charter dropped 28p to 656p, while Johnson Matthey shed 19p to 473p.

(Photograph and graphic omitted)