Gestetner calls off camera business sale

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The Independent Online
GESTETNER, the photocopier supplier, has been forced to terminate the proposed dollars 52.5m ( pounds 34m) sale of its Vivitar and Hanimex camera distribution business to Concord Camera, a small US company.

The move comes at a time of growing bid rumours concerning Gestetner. Possible predators include Ricoh, the Japanese photocopier maker, which already owns 24 per cent, and Inchcape, the UK trading group.

The camera deal was announced last September, but has fallen through because Concord, whose shares are traded on the Nasdaq market, could not raise sufficient cash by last Friday's deadline.

The proposed terms involved a dollars 40m cash payment by Concord and the issue of 1.3 million shares with a put option enabling Gestetner to raise pounds 12.5m cash after a year.

Despite the setback the two sides are still in talks to agree on an alternative deal. Although Gestetner is sticking to its original asking price for the business, it is considering another way of structuring the deal. It is also holding separate discussions with two other potential buyers.

The camera business, which has been hit by recession, was put up for sale early last year because it did not fit with the group's core activities in office equipment.

It took Gestetner nine months to find a buyer. A spokesman said that the latest delay over its disposal would not have a significant effect on the group.

The camera business contributed trading profits of pounds 1.1m to the group's total operating surplus of pounds 38.5m in the year to 31 October. Its turnover amounted to pounds 81.4m, about a 10th of Gestetner's total sales last year.

The disposal excludes Hanimex Australasia. Gestetner will also retain film and processing operations in Australia, New Zealand and the UK, together with the rights to the Hanimex brand name in Australia.

Proceeds from the sale are expected to be used to cut Gestetner's borrowings, which rose from pounds 64.4m to pounds 95m last year, partly due to the devaluation of sterling.

Net debts as a proportion of shareholders' funds rose from 25 to 36 per cent.

However, last month the company reported an increase in taxable profits from pounds 22.4m to pounds 27.2m for 1992, with earnings up from 11.6p to 12.1p.

The shares closed 1p lower at 151p yesterday, valuing the group at about pounds 151m.

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