MB-Caradon to sell CarnaudMetalbox

MB-CARADON, the central heating and cheque printing group, is planning to raise more than pounds 500m with the possible sale of its 25.3 per cent stake in CarnaudMetalbox (CMB), the Anglo- French packaging group.

The company said yesterday it was calling a shareholders' meeting next month to seek their approval for the disposal, triggering speculation that it would soon sell the stake to CGIP, the French conglomerate that already owns a similar stake and has first rights to buy MB-Caradon's interest.

CGIP, which also has management control over CMB, is expected to finance the purchase as part of a consortium of French institutional investors.

MB-Caradon said proceeds from the disposal would provide it with cash to fund the growth of its businesses.

Yesterday's move prompted rumours that the group was raising the cash to fund a large acquisition in the building materials sector.

Analysts estimate that the sale proceeds would leave MB- Caradon with net cash of about pounds 450m. Possible targets include Norcros, Ibstock Johnson and Marley.

A disposal of its stake to French interests would mark the end of an ill-fated merger that created CMB in 1989. The company, one of the world's biggest consumer packaging makers, was formed with the merger of Metal Box of UK and Carnaud of France with a cross-Channel management and shareholder base.

But serious boardroom clashes and a poor financial performance resulted in French management control. Over the past year, there has also been a steady decline in UK shareholders.

Peter Jansen, MB's chief executive, said: 'We do not have to sell but the powers being sought would give us additional room for manoeuvre if a suitable (acquisition) opportunity should arise at some point.'

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