Hillsdown to be split into three

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The Independent Online
HILLSDOWN Holdings, the Typhoo tea to Buxton chickens group chaired by Sir John Nott, the former Defence Secretary, announced yesterday that it planned to break itself up in an effort to reverse its dismal performance on the stock market over the last few years.

Hillsdown plans to create three quoted companies by demerging its Fairview homes business and its chilled food division, which provides foods and salads to chains such as Marks & Spencer.

The group is also proposing a raft of disposals including its furniture division, which comprises brands such as Christie-Tyler, Walker & Homer and Carleton.

In addition Ross Breeder, a market leader in genetically improving chickens for breeding, Buxton chickens, its potatoes business and the Continental European biscuits and wines and spirits operations will all be sold off.

Hillsdown hopes to raise up to pounds 600m from disposals, the majority of which will be returned to shareholders rather than spent on new acquisitions. After the disposals Hillsdown will be a pure grocery group, retaining famous brands such as Typhoo and Chivers. But the changes are likely to see the Hillsdown name, which has been around for 28 years, disappear.

Hillsdown also plans to slash the size of its pounds 10m head office overhead and will undergo a radical boardroom shake-up although there will not be widespread job losses throughout the group.

George Greener, the group's chief executive for the last two years, who has been instrumental in orchestrating the break-up of the group, plans to step down to be succeeded by Michael Teacher, a divisional director.

Mr Greener could receive a pay off of around pounds 400,000. Ray Mackie, Hillsdown's finance director, is also leaving the group.

Analysts predict that Fairview New Homes could be valued at more than pounds 300m, while the chilled food division could be worth around pounds 400m. They have placed a break-up value of around 200p on the group. Hillsdown's shares closed at 189p yesterday, up 2.5p.

Hillsdown's shares have underperformed the stock market by almost 50 per cent over the last five years.