It's all change again at Lonrho

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The Independent Online
So farewell then Mr Bock. Or is it au revoir? Having ousted Tiny Rowland from Lonrho and destroyed all vestiges of his power, Mr Bock is now selling out to Anglo-American in the expectation that once Lonrho's planned demerger is complete, he will be able to buy back into the trading side, leaving Anglo in control of the core mining activities.

No doubt these arrangements suit Mr Bock very well but we will have to await the small print to see if they are also quite such good news for Lonrho's other long-suffering shareholders. There are obvious dangers for them here. The first is that once Anglo-American is fully in the chair at Lonrho, it will run the company as if it is wholly part of the Anglo- American empire. This may not be an altogether bad thing, for outside shareholders will at least be getting the benefit of a company with established expertise in mining, a company which presumably knows what it is doing.

The downside is that Lonrho becomes run in Anglo-American's wider interests, which are not necessarily the same as those of its outside shareholders. On the other side of the business, shareholders need to be wary of the terms on which Mr Bock buys back in. This will presumably be accomplished by Anglo-American selling Mr Bock back his interest in the unwanted half. Given the complementary needs of both Mr Bock and Anglo, there is a very real risk here that other shareholders are going to be disadvantaged.

During his brief tenure at Lonrho, Mr Bock has on the whole served his shareholders well. Let's hope he continues to do so through this quite complex series of transactions.

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