Hanson denies seeking trade sale to lift shares

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The Independent Online
Hanson yesterday denied speculation that it has been quietly seeking out trade buyers for some of its businesses ahead of a planned four-way break-up of the conglomerate.

According to persistent market rumours, Hanson has been contacting parties who might be potential buyers of its Imperial tobacco and Millennium chemicals businesses in an attempt to restore confidence in the share price, which has plunged since the January announcement of demerger plans.

Derek Bonham, chief executive, said: "There will be no trade sales. Anything we do now will totally disrupt the demerger process. That story is totally speculative." He added that there was no way that Hanson would interfere with the many complex legal arrangements that had been put in place to allow the first two spin-offs, of the chemicals and tobacco activities, on 1 October. Details of those two demergers are expected next Friday, including an indication of the possible level of dividend to be paid on the shares to be handed to existing Hanson shareholders.

Fears that the combined dividends of the four companies would amount to no more than about 6.2p (against the 12p payout last year) have been a big factor in Hanson's massive stock market underperformance since the demerger was first announced.

Immediately after the split was first mooted, Hanson's shares reached a high of 211.5p, but as analysts focused on the complex tax and dividend issues surrounding the break-up, their forecasts of the group's underlying value slipped further and further. Currently there is a consensus estimate of between 160p and 175p, against yesterday's close of 166.5p, down 2p.

News of the latest demerger developments accompanied nine-month figures which showed continued deterioration in trading conditions for Hanson's two US chemicals businesses, Quantum and SCM, offset by a strong performance from Energy, the Peabody coal to Eastern Group division that will be the last operation to be floated off next January.

Overall pre-tax profits of pounds 1.48bn were 74 per cent higher than last year's pounds 850m, inflated by a pounds 608m one-off profit relating to the sale of Cavenham, Suburban Propane and a handful of other non-core businesses. Earnings per share rose from 13.6p to 17.9p.

After a weak third quarter, nine-month profits for chemicals fell from pounds 403m to pounds 219m while energy soared from pounds 111m to pounds 345m. Tobacco grew modestly to pounds 270m (pounds 251m) and building materials remained more or less unchanged at pounds 154m (pounds 156m).