Fisons soars on sell-off

Click to follow
Shares leapt by 13 per cent in Fisons as the drugs group announced the £202m sale of its Scientific Instruments business. City observers said the move immediately makes Fisons itself more attractive to potential predators.

The shares added 17p to 146p as the company confirmed that the purchaser of the division, which made £11.7m losses last year, was Thermo Instruments Systems of the US.

"This is very good news," said a City pharmaceuticals specialist. "Scientific Instruments has been looked on as one of the biggest cans of worms at Fisons, deterring potential bidders, because it was looked on as a black hole. It makes a bid for Fisons more likely."

City pundits also believed Fisons had achieved a good price for the business, and that it indicated that chief executive Stuart Wallis, who joined last September from Bowater, the packaging firm, was determined there would be no sacred cows in his assessment of ongoing operations.

The Scientific Instruments business employs 3,000 worldwide, and capital employed at the end of 1994 was £128.5m. The division includes VG Instruments and Fisons Applied Sensor Technology in the UK, Applied Research Laboratories in Switzerland, Gebruder Haake in Germany, CE Instruments in Italy, and Kevex in the US.

Mr Wallis said the sale was a big step "in reshaping the group to focus on its best long-term growth prospects".

Proceeds of the deal will be used to reduce borrowings. Fisons is due to announce its 1994 trading results next Tuesday, with analysts predicting pre-tax profits of £54m.