Hanson sells contract firms

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HANSON, the industrial conglomerate, has sold the contracting businesses acquired as part of its takeover of Beazer last December to management for pounds 53m.

The deal is unusual in that pounds 40m of the price has been funded from cash resources held by subsidiaries of Kier Group, the company being bought out. This required court approval to allow the company to give assistance to buy its own shares.

It also meant that Hanson has been able to extract cash from the business which would otherwise have been blocked because Kier did not have sufficient distributable reserves to pay a dividend to its parent.

Hanson has also taken up the pounds 9.7m redeemable preference shares issued as part of the deal and 10 per cent of the pounds 2.7m raised through the issue of ordinary shares. The 73 directors of the group and its subsidiaries have subscribed for a further 45 per cent of the shares, with the remainder allocated to the group's 3,500 employees through an employee share ownership plan. Hanson will also get a pounds 2m payment from Kier's profits for the year to 30 June.

Last year the businesses made pounds 8m before tax on pounds 598m sales and had net assets of pounds 41m. Colin Busby, chairman and chief executive of Kier, said the order book is currently pounds 375m.

The deal includes Dudley Coles, the contracting part of Hanson's ARC division acquired with Consolidated Gold Fields, leaving Hanson with no contracting businesses in the UK. Earlier this year, it disposed of Beazer's Australian contracting business but still owns the US operation. It is also retaining Beazer's UK housing business.