Close pays pounds 19m for Winterflood

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The Independent Online
UNION Discount, the troubled money markets specialist, is selling 90.5 per cent of Winterflood Securities to Close Brothers, the merchant bank. The deal is worth pounds 19.1m, above market estimates.

The sale of Winterflood, which makes markets in the shares of Britain's 1,000 smallest stocks, also marks the end of Union's attempts to find a buyer or merger partner for the rest of its activities, according to George Blunden, Union's recently installed chief executive.

The firm's position as one of the City's dominant money dealers was damaged in the 1980s by a disastrous diversification into leasing, which Mr Blunden admits suffered from 'fraud and very poor management control.' He reported a reduced loss for 1992 of pounds 16.3m - down from pounds 23.6m in 1991 - which he said was evidence that Union was turning the corner.

Although unwilling to forecast when Union would return to profit, he said: 'I hope it will be this year.' He wanted the capital from the Winterflood deal to expand Aitken Campbell, the gilts dealer, to take advantage of the Government's need to expand bond sales to small investors.

Brian Winterflood and his team of 35 retain 9.5 per cent of Winterflood Securities and have options over a further 15 per cent.

Close is paying for its Winterflood holding through a pounds 17.3m share placing and open offer on the basis of one for seven shares for existing shareholders.