£25m windfall for Hogg Robinson directors

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The Independent Online

Directors at the business travel company Hogg Robinson are to share in a windfall of £25m when the company returns to the stock market, with the chief executive David Radcliffe's stake expected to be worth at least £3m.

The company ended months of speculation yesterday, confirming its plans to push ahead with a float within the next four to six weeks. The group, which was taken private by Permira in 2000, is looking to raise about £190m to fund acquisitions as well as to pay down some of its pension scheme deficit. The floated business is expected to have a market value of £450m to £500m, placing it in the FTSE 250.

Permira, which has a 90 per cent stake in the company, is planning to keep some of its holding after the float, but would not disclose how much. The remaining 10 per cent of the business is currently owned by a group of 20 directors, including Mr Radcliffe.

Mr Radcliffe said the main reason for the float was that Permira was looking for an exit from its investment. However, he said the company was also keen to attract new money, and planned to continue its aggressive acquisitive growth strategy.

"We've done a number of acquisitions over the past few years - and there are a number of others we would like to do," he said. "The market is worth more than £3bn, so there are a number of opportunities out there."

He said the company was already in talks with several other businesses, with a view to making a bid.

Some £28.5m of the float proceeds will be paid into the pension fund, which had a deficit of £150m in March 2005, according to the company's last set of published accounts. Mr Radcliffe said the group would pay down the rest of the deficit over the next few years, adding that it had received clearance from the Pensions Regulator for its proposals.

The company hopes to get the listing completed by the end of September or the first few days of next month. Lazard is acting as the financial adviser to the group as well as joint sponsor, along with Merrill Lynch.

Hogg Robinson was founded in 1845 and initially floated in 1963. It was taken private six years ago.