Food group to split three ways

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The Independent Online
HILLSDOWN HOLDINGS, the food-to-housebuilding conglomerate, announced details yesterday of its break-up plans that will see the group split into three separately quoted companies in a move designed to boost shareholder value.

Hillsdown, which held abortive takeover talks with Unigate earlier this year, will emerge from the process in a slimmed down form. The company also plans to dispose of its Ross Breeders chicken business, as well as its operations in poultry processing, potatoes, wine and spirits and furniture.

Trading in the new Terranova chilled foods business and the Fairview homes company will start on 5 October. For every four Hillsdown shares held, investors will receive one share in each of Terranova and Fairview, and two in the new Hillsdown business.

Analysts are putting a tentative valuation of around pounds 275m for Terranova and pounds 250m for Fairview. The disposal programme could net around pounds 600m, including pounds 250m for the furniture business and pounds 260m for the poultry operations.

Part of the proceeds will be used to repay debt but the remainder will be returned to shareholders in two tranches, one later this year and the rest next year when the poultry businesses are sold. Analysts are suggesting a total cash return of about 40p-50p per share.

The details were announced as Hillsdown unveiled flat half-year operating profits of pounds 66.8m. This disguised a sharp fall in profits at the poultry operations which have been hit by over-supply and weakening consumer demand.

Former chief executive George Greener and Ray Mackie, the former finance director, have left the group and will be entitled to one year's compensation. Bill Mackie, the head of the poultry operation, is retiring and will also be eligible for one year's salary.

Hillsdown said it had not held any further talks with Unigate since the original discussions were terminated in May. Unigate had originally offered around 217p per share before talks broke down.

Hillsdown shares closed 2p higher at 141p yesterday.

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