Failed US move cost Lucas pounds 13m

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The Independent Online
LUCASVARITY'S failed attempt to move its headquarters and market listing from London to New York cost the car components and aerospace group pounds 13m, it emerged yesterday.

Shareholders voted down the group's plan to switch domicile to the US last month in a humiliating snub for chief executive Victor Rice. Mr Rice said following the defeat that it was now "business as usual".

LucasVarity is not likely to revive the plan in the near term. However, a spokesman said: "From a strategic standpoint we are undertaking significant deliberations. We will detail the outcome next March when we report full- year results."

There has been speculation that LucasVarity will seek to merge with a rival US engineering business, which could result in it losing its quote on the London Stock Exchange.

The pounds 13m bill helped reduce profits for the third quarter by 16 per cent from pounds 85m to pounds 71m. The bulk of the costs came from fees charged by its investment bank advisers, Lazards, Morgan Stanley and Merrill Lynch, and its two brokers, Hoare Govett and Cazenove.

LucasVarity said conditions remained difficult in Asia and South America, while trading was becoming tougher in other regions. It expects the North American and European car markets to decline by 3 to 4 per cent next year.

Cost savings should reach pounds 90m on an annualised basis by year-end. The group expects to hit its pounds 120m target next year.