High Court stalls pounds 1bn Co-op bid

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The Independent Online
An audacious pounds 1.2bn break-up bid for the whole of the Co-operative Wholesale Society was thwarted by legal action yesterday when the CWS obtained a High Court order preventing Andrew Regan and his Lanica Trust vehicle from using confidential information.

The move came as Mr Regan was on the point of launching his ambitious attack through Galileo, an offshoot of Lanica. In a statement issued just before 6pm Galileo confirmed that it had intended to announce "today" formal proposals for the conversion of the CWS to a limited company so that Galileo could then make an offer to acquire the company.

The bid would have included the Co-operative Bank as well as the food retailing operations, funeral parlours, travel agencies and the chain of opticians. The only business not included in the offer was the Co-operative Insurance Society which would have continued to be owned by its membership.

The statement said Galileo had been preventing from going ahead with its offer by the court injunction. It added: "Galileo regrets that the members of the CWS, both individual and corporate, have, for the time being, been denied the opportunity to consider its proposals which it is confident would benfit members, employees, customers and the co-operative movement as a whole." However, if Galileo can make its bid wihtout the use of confindential infomations it could still proceed.

It is understood that the 31 year-old Mr Regan had lined up buyers for all the CWS businesses. The Allied Irish Bank was in line to buy the Co- op Bank from Galileo, if the bid had been successful.

The court order was granted against Mr Regan, his right hand man David Lyons, Lanica Trust and Galileo, the arms length company being used to mount the bid. Also cited was Allan Green who was suspended on Thursday by the CWS as controller of its retailing operations following suspicions of "recent serious breaches of trust."

The order was granted by Justice Gavin Lightman and prohibits the three men from using any confidential CWS information. They are also required to disclose, under oath, all the information that has been passed to them as well as how the information would have been used. They must do this by 4pm next Tuesday and return all the information to the CWS.

The court injunction and the Galileo statement ends a dramatic week in what has become come one of the most mesmerising "bid" battles of recent years. It came a day after Mr Green and buying manager David Chambers were suspended by the CWS amid suspicions that they were colluding with Mr Regan. This action was the result of a CWS monitoring operation which included photographs of secret meetings and the logging of telephone calls between Mr Regan and Mr Green.

The CWS said it hoped that the injunction and the suspensions would "bring this matter to a close."

Mr Regan and Lanica Trust were making no comment yesterday. It is thought that the company was in talks with its advisers on how best to proceed after this latest setback.

Early yesterday it looked like Mr Regan might be set to take the initiative. By mid-morning there were strong rumours in the stock market that there would be an announcement from Lanica "within the hour." This was thought to be a pounds 1.2bn offer for the whole CWS which would have involved the conversion of the society into a limited company and the distribution of pounds 600 to pounds 2,400 to each of the society's individual members. There are 2 million members of the CWS of which 500,000 are considered "active."

But before Mr Regan had a chance to strike, the Co-op moved first by obtaining the court order.

The CWS declined to comment further on the court order.

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