Hogg Robinson sold to management in £232m buy-out

Hogg Robinson, the business travel agency, yesterday agreed to a £232m offer from a management buy-out group after concluding that taking the company private was the best way to realise shareholder value.

The 285p-a-share cash bid was tabled by a team including Hogg Robinson's chief executive, David Radcliffe, and Neville Bain, its non-executive chairman. The offer is backed by Schroder Ventures and is being made through a special-purpose vehicle named Farnborough Limited.

Hogg Robinson shares closed up 35p at 277.5p. The offer represents a 57 per cent premium to the close on 20 March, the day before the company said it was in advanced talks with a management team.

Mr Radcliffe said: "This is a full and fair price... We are, at the end of the day, a small, mid-cap company. And it's common knowledge that mid-caps are not the exciting prospect for investors they were a year ago, particularly when they are not producing exciting growth every year." He said the deal would allow the company to "take time out" and concentrate on improving its specialist corporate services and developing an e-commerce strategy without the pressure of pleasing the City. But he did not rule out the idea of refloating in the future.

Tony Isaac, a Hogg Robinson independent director, said: "Against a background of significant changes in the business travel industry and the current performance against target of certain recent acquisitions, Hogg Robinson would be unable to deliver the growth expected of a publicly quoted company at the same time as undertaking the strategic changes necessary to make it competitive."

The deal, which has been agreed by shareholders representing 31.9 per cent of issued capital, including the group's directors, removes the uncertainty around the company since October's rejection of an informal 330p-a-share offer from Active Value, the investment group.

In December the group's half-year results to 30 September 1999 showed flat profits of £14.6m. At the same time, the group announced the £32m sale of its Advizas financial services division to "remove all future pensions review liabilities" following a scandal over alleged improperly sold pensions.

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