Johnson Matthey stock falls after sale

SHARES IN Johnson Matthey, the speciality chemicals and precious metals business, yesterday dropped 13.5p to 618p after the group announced the pounds 420m disposal of its electronic materials unit to Allied Signal.

The group, which signalled its intention to spin off the division last November, had been looking to demerge the unit and seek a listing on Nasdaq. But John Sheldrick, finance director, said the sale maximised value and offered shareholders more certainty than a Nasdaq listing.

"The option to do the IPO remained until the last moment but we were advised to wait until next year. We got some good offers and decided this was the best way to go," he said.

The sale puts the company on the buying trail for bolt-on acquisitions and larger businesses, with the intention to focus on the core catalyst and fine chemicals division, which accounts for more than half the business. Mr Sheldrick said talks were under way with a number of private US pharmaceutical materials firms, while larger global prospects were also being looked at.

Analysts said the sale price achieved was not as high as it could have been and reflected the market perception of electronic materials. One said: "It's slightly disappointing on the price but it's a clear-cut sale and it clearly has a number of things in the pipeline to spend the money on."