Harrisons considers break-up options

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The Independent Online
Harrisons & Crosfield, the troubled chemicals to pet food conglomerate, said yesterday that it was willing to break itself up in an effort to reverse the alarming decline in its share price, which has almost halved over the last four years.

Bill Turcan, H&C's chief executive, hinted that at least one of the company's three operating divisions would be sold. The group, which has a stock market value of almost pounds 825m, is thought likely to keep the bulk of its chemicals business, which provides pigments to paint manufacturers. However its timber and building supplies operation, which includes the Harcros builder's merchant chain, and its food and agriculture business, producing anything from pet food and cattle feed to malt for beer, could both be sold.

Mr Turcan said: "We are not satisfied with our share price performance. We are aware of the pressure on conglomerates and whatever they do they seem to be derated. While we may not unbundle all our businesses we are undergoing a fundamental review of the company.

"We have said that we want to grow our chemical business and are looking for acquisitions," he added.

However, the group stopped short of giving any details on which operations would be chopped and disappointed City observers by saying it would not announce the results of the review until next month.

One analyst said: "A break-up is inevitable. The builder's merchant is the obvious candidate for a demerger and other businesses will no doubt be sold. Any proceeds should be returned to shareholders as the group with its record will not get away with ploughing the money back into the business."

The group is likely to give shareholders a special dividend or launch a share buy-back with any disposal proceeds. It has come under increasing pressure from large institutional shareholders to do something about its plummeting share price.

Meanwhile Harrisons' saw pre-tax profits slump from pounds 64m to pounds 38.6m in the six months to June with the recent rise in the value of sterling costing the group pounds 8m.

The shares rose 3.5p to 115p yesterday, compared to analysts' forecasts of a break up value of 125p-140p a share.

People & Business, page 20