Lonrho board split on merger

Four directors oppose pounds 430m fusion of platinum interests with those of South African rivals
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The Independent Online
THE board of conglomerate Lonrho is understood to be deeply divided over the pounds 430m merger of its platinum interests, due to be finalised this week, with those of South African rivals Gencor and Impala.

Sources close to the board say four key directors are opposed to the deal on commercial grounds. A meeting last Monday broke up, sources say, pending further mining and legal reports and directors are flying in for a fresh gathering tomorrow.

Whatever happens, German chief executive Dieter Bock is expected to win at Lonrho's formal monthly board meeting this Thursday. Then directors are due to sign off a shareholder circular, with an extraordinary general meeting to approve the deal expected by the end of November.

"There's much opposition. Four directors were opposed. Bock tried to get [their] support," a close source said.

The split comes as ousted founder Tiny Rowland renewed his bitter war with Mr Bock, with a circular to banks and brokers in London, Germany and South Africa, rebutting attacks by a German journalist this year.

Mr Rowland has petitioned Frankfurt's public prosecutor to bring criminal perjury charges against Mr Bock and an associate after the journalist, Frank Anderssohn, retracted attacks made in an affidavit in April.

In the filed complaint, Mr Rowland alleges Mr Bock and the aide were behind allegations in a Sunday Times report in May that the tycoon had paid Mr Anderssohn to discredit his German rival.

The tycoon's broadside centres on a dispute to force Mr Bock to honour a deal last year to cancel an option over some 50 million of Mr Rowland's shares, struck when Mr Bock rescuedLonrho at the end of 1992.

Mr Bock tore up the peace pact, detailed in Lonrho's report and accounts, when Mr Rowland was sacked by the board in March. The Anderssohn affidavit was then used in a London court in May to prevent Mr Rowland gaining summary judgment in his favour. A Lonrho spokesman denied Mr Bock or Lonrho had offered Mr Anderssohn up to pounds 1m for co-operation or the existence of a "smoking tape" of conversations, which the journalist claims in a new affidavit circulated by Mr Rowland.

"This is merely another Tiny attempt to cause trouble . . . Dieter Bock has never offered anything, himself or through an agent to Mr Andersohn," he said.

The spokesman also denied splits over the merger, saying it would be announced as agreed this week or early next.

Lonrho's shares, which closed at 158.5p on Friday, have been underpinned by the merger, first outlined in June. Under the deal, it is set to swap its 73 percent in South Africa's Eastern and Western Platinum mines for 32 per cent of New Plats, a new company taking in Gencor and Impala's interests.

Lonrho is also working on possible hive-offs of its hotels, UK and other African interests.

But the fact that Lonrho's mines are young while Gencor's are old, underlies the split.

Mr Rowland also objects, fearing Gencor control: "It does not make sense. I am strongly opposed and the entire team in South Africa is entirely opposed," he said on Friday.