L&G looks into floating Mithras joint venture

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The Independent Online
LEGAL & General is considering a stock market flotation for Mithras Investment Trust, a three-year-old joint venture which has invested about pounds 35m in highly borrowed management buyouts and company takeovers, writes Paul Durman.

Mithras is jointly owned by Legal & General, Banque Indosuez of France and Prudential Insurance Company of America. Its board includes David Prosser, Legal & General's chief executive, and is headed by Sir Michael Richardson, chairman of the securities firm Smith New Court.

David Rough, Legal & General's investment director and a director of Mithras, said no firm decision had been taken on a flotation and nothing should be expected in the next couple of months.

However, Mithras's records at Companies House show that its owners have always intended to seek a UK listing 'once a portfolio of sufficient size has been built up'.

Despite its name, Mithras does not enjoy the tax status of an investment trust, which is available only to quoted companies. This means it could face a substantial capital gains tax liability should it want to realise its investments.

Mithras was set up to provide mezzanine finance - high interest loans with some exposure to equity - for leveraged buyouts. Its three backers originally agreed to provide it with funding of up to pounds 66m.

The company is managed by Legal & General Ventures. Its investments have included Anglian Windows, BPCC, the printing company, Gaymer Group, the cider and Babycham business bought out of Allied Lyons, and Aerostructures Hamble, an aerospace engineering business bought out of British Aerospace last year.

Anglian was the first of these to achieve a stock market flotation. Its shares stand at 326p against the 5p that Mithras paid for its equity stake. Mithras's latest accounts, for 1992, claim an 81.3 per cent rise in net asset value per share since March 1990 despite a conservative valuation of its investments. By the end of last year, Mithras had total assets of pounds 34.3m. It made a reduced pre-tax profit of pounds 483,000 last year.

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