Lanica suspended amid muddle over Co-op deal

The strange tale of Lanica Trust, the tiny investment vehicle, took a fresh twist yesterday when dealings in the company's shares were suspended ahead of a planned approach to the Co-operative movement about buying some of its non-food operations.

The suspension followed volatile early trading in Lanica shares which saw the stock soar a further 313p before dealings were halted at 1,950p. The surge was the latest in a series of wild movements in the shares, which were trading at just 116p last September when 31-year-old entrepreneur Andrew Regan bought a controlling stake.

The Stock Exchange said it would be seeking further discussions with Lanica but had not launched a full scale inquiry.

In a bizarre sequence of events the shares were suspended before Lanica had held a single conversation with the Co-op about a possible pounds 500m deal and before the Co-op was even aware of the interest.

But after news of Lanica's intentions leaked over the weekend, the Guernsey- registered group was forced into issuing a statement to the Stock Exchange yesterday. It said it had sent letters to the chief executives of both the Co-operative Retail Society and its larger sister, the Co-operative Wholesale Society saying it wished "to discuss the possible purchase of certain non-food business of the societies".

Lanica's advisers said its approach had received a "very courteous response".

This view was at variance with a tersely worded statement from the Co- op which rejected Lanica's overtures outright. It said: "The CWS has today written to its members giving them an assurance that the CWS has not been in discussion with Mr Regan, does not have the details of what his aspirations are and has no plans to dispose of CWS businesses or assets to him or his investment company."

The Co-op said it had received no contact from Mr Regan before yesterday's approach, not even a telephone call. "The first it [the CWS] learnt of his impending approach was via a leak to a newspaper," it said.

Mr Regan, the son of Spring Ram chief executive Roger Regan, was preparing for a holiday in Barbados yesterday and was unavailable for comment. However, it is thought that he is keen to prepare a pounds 500m deal that could see Lanica buy some of the Co-op's non-food interests.