Crabtree to reverse into Somerset

SOMERSET TRUST, the shell company run by the City dealmakers Stephen Hargrave and Luke Johnson, has found a manufacturer for a reverse takeover.

Crabtree, a Tyneside maker of specialist printing machines, is reversing into Somerset by way of a placing and rights issue to raise pounds 14.7m.

The three-for-one rights issue, sponsored by Credit Lyonnais Laing and underwritten by Hill Samuel, will raise pounds 5.4m. The price for both the rights and the placing is 150p, a discount of 15.7 per cent to the price at which Somerset's shares were suspended. The placing will raise pounds 9.3m.

The suspension came a fortnight ago when the company announced it was in talks about a reverse takeover. Mr Hargrave and Mr Johnson bought into Somerset last summer.

Mr Hargrave was a City journalist with the Evening Standard before going into business. Mr Johnson, who is a son of the journalist Paul, was an analyst with Kleinwort Benson. They were most recently involved in the reverse takeover that brought the Pizza Express group to the market.

Karl Watkin, chairman of Crabtree, will be chairman of Somerset after the deal is completed. The company's name will be changed to Crabtree.

Crabtree made operating profits of pounds 1.1m on turnover of pounds 8.9m in the six months to 31 March.

The total consideration for the acquisition is pounds 19.4m, satisfied in cash and shares.