Graystone buys Syphon

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The Independent Online
BRITISH Syphon, which recently abandoned a two-year hunt for a big acquisition, is being taken over for pounds 33m by Graystone, which has been transformed from a shell into an electrical and mechanical engineering company by a buying spree over the past year.

Acquisitions include FKI Cableform and a group of companies from Prospect Industries.

The latest deal ends a strained relationship between British Syphon and Nathu Puri, who used his 23 per cent shareholding to block a management buyout of the company four years ago.

He has accepted the bid, and will end up with a 3 per cent stake in the enlarged group. Britannia, owned by Bankers Trust, the American bank, has also pledged its 69.4 per cent inherited from the aborted buyout.

It was Britannia, which will have 11 per cent of Graystone, that led to British Syphon dropping its acquisitive hunt, by withdrawing its support for the board's strategy. That subsequently led to British Syphon redistributing pounds 21m of its cash pile via a special dividend to shareholders. The company still has net cash of pounds 9m.

The bid terms are pounds 76.30 cash, 34 new Graystone ordinary shares, and 28 non-voting convertible preference shares for every 100 shares held in British Syphon.

Graystone is also part-funding the deal through an pounds 18.4m rights issue, pitched on the basis of seven-for-four at 11p a share. Graystone's shares fell 0.5p to 10p, which values British Syphon shares at 96.5p against a market price of 83p, down 12p.

All of British Syphon's directors are being kept on. Bryan Morrall, chairman, will become deputy chairman of Graystone, and Hugh Hayes, managing director, will retain an executive seat on the board.

Dick Richardson, who became chairman of Graystone in June last year when the company was called Ptarmigan, said the main fit between the two companies was their lighting businesses. The purchase will triple Graystone's annual turnover to around pounds 60m.

British Syphon has three divisions - engineering, packaging materials, and automotive components.

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