Channel Islands deal creates Aim's fifth-biggest group

The Channel Islands' leading brewer and supermarket chain are merging to create one of the largest companies on the Alternative Investment Market.

In a three-way tie-up orchestrated by Tom Scott, a Guernsey entrepreneur, Ann Street, Jersey's historic brewing and pubs company, will combine with Le Riche, which has 31 foodstores and runs the local Marks & Spencer franchise.

Mr Scott's car finance company is also joining the conglomerate. Its interests will span brewing, pubs, restaurants, food retailing and drinks wholesaling, and credit and property. It will dominate island life across Jersey and Guernsey, employing more than 3,300 people.

The combined company, to be called CI Traders, will have a market capitalisation of about £200m.

That will put it in the top five AIM-listed companies, behind Peel Holdings, a property company worth £830m, and Aquarius Platinum, Sibir Energy and Brancote, which have market values of about £230m.

Mr Scott said CI Traders would have more buying power and easier access to the capital markets for overseas expansion: "A market cap of more than £200m will put us into a different league. We will be able to attract institutional shareholders, whereas we are now predominantly owned by private Channel Islands investors."

The combined group will extract cost savings from merging head offices and gain from operational synergies. In particular, Ann Street wholesales beer and wine, and runs a soft drinks bottling plant in France, while Le Riche runs a number of wine warehouses across the islands.

Mr Scott said: "These companies are over 100 years old and bringing them together has been tried two or three times over the years, but people have got in the way in the past."

Mr Scott, currently executive chairman of Ann Street, will be executive chairman of the new group, while the Le Riche chief executive, Martin Bralsford, will hold the same position at CI Traders.

Ann Street and Le Riche are both currently fully-listed in London and the Channel Islands. Ann Street shares were up 4p at 460p. Le Riche closed down 10p at 570p.