Britax to look for a buyer

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The Independent Online

David Newlands, the chairman of Tomkins who is expected to preside over the conglomerate's break-up, is under pressure to repeat the trick at Britax.

David Newlands, the chairman of Tomkins who is expected to preside over the conglomerate's break-up, is under pressure to repeat the trick at Britax.

Perry Capital, the active US fund manager, has built up a stake in the vehicle components and car safety group, and it is expected to press Mr Newlands, also its chairman, to look for a buyer. At least one other institutional shareholder in Britax is understood to be keen for Mr Newlands to find new owners for Britax. Perry Capital declined to comment.

Britax shares have failed to recover since the revelation in August of a £25m hit caused largely by accounting problems at its aircraft interior systems subsidiary. Perry has taken the opportunity to build up a 1.69 per cent stake and is expected to build on the holding if Britax shares remain depressed. They closed on Friday at 1021/2p, barely half the high set two years ago of 1931/2p.

Mr Newlands joined Britax last year with a brief to conduct a strategic review of the business. The first stage of the new era at Britax will begin tomorrow when Bernard Brogan takes the helm as chief executive. He is replacing Richard Marton, with the firm since 1973.

If Britax is put up for sale, it is expected to attract the attention of venture capitalists eager to take it private. Its low valuation - it has a market cap of only £307m despite making pre-tax profits of £57m last year - would enable a venture capitalist to offer shareholders a significant premium to the current share price.

Another possibility would be to carve up Britax along the lines of its main divisions - aircraft interior systems, specialised vehicle systems and childcare safety systems. In June, Britax sold its rear vision systems business for £207m.

Perry Capital is little known in the UK, but earned a degree of fame last year when it was one of the most vociferous critics of Olivetti's proposed takeover of Telecom Italia.

One Britax shareholder said: "Perry has not taken this stake for the good of its health."

Mr Newlands, who previously worked for the advertising agency Saatchi & Saatchi, is currently occupied with the task of solving the crisis at Tomkins left by the departure of chief executive Greg Hutchings. He resigned two weeks ago amid allegations of corporate excess including the use of company jets and flats by directors for private use. Mr Newlands is supervising a strategic review of Tomkins' assortment of businesses which is expected to lead to the break-up of the conglomerate.

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