Nott to unveil three-way Hillsdown carve-up
Sunday 06 September 1998
The plans include a pounds 300m October stock market listing for Terranova Foods, Hillsdown's chilled foods business, and a pounds 250m listing for Fairview Homes, its house- building subsidiary.
Advisers hope the announcement, due on Tuesday, will deflect attention from a set of poor profit figures. "The results are going to be pretty bad if you add up the three and compare them to what the whole once produced," a City source said.
The demerger plans, which will give shareholders stock market plays in Terranova, Fairview and the rump Hillsdown groceries company, were devised by Dresdner Kleinwort Benson, but the role of sponsor to the floats has been usurped by Schroders.
Sir John Nott, the chairman, has decided to push ahead with the demerger to head off criticism of poor first-half results, hit by the impact of a strong pound on the group's poultry division.
Hillsdown is under pressure from the City to create better value for investors after failure earlier this year to secure a pounds 1.6bn takeover from Unigate, which pulled out of the talks after taking fright at the scale of Hillsdown's problems in the poultry division.
Sir John will also give an update this week on plans for the trade sales of Hillsdown's furniture manufacturing, poultry breeding, wines and spirits, chicken and eggs, and potato businesses.
Poultry profits collapsed as Continental imports flooded into the UK on the back of a strong pound. Poor summer weather has also hit sales of poultry for barbecues.
Shareholders will be asked to approve the break up of the group at an EGM on 2 October, with trading in the shares to begin a few days later.
Terranova is viewed as the most exciting of the two businesses to be listed. Last year it made profits of pounds 27m on turnover of pounds 410m. The company has 19 factories across Europe and is a big supplier of sandwiches and chilled meals to supermarket groups including Marks and Spencer.
Fairview specialises in building mass-market housing in the South-east. Last year, it made profits of pounds 41m on turnover of pounds 163m, but the slowdown in the housing market is already prompting a rethink by advisers on the valuation of the business.
One City source said; "There are going to be a lot of downgrades on these businesses after the results are announced, because the poultry business simply hasn't rebounded in the way expected. We wanted a clean break with this business but we are now going to have to keep it until profits rebound and we can get a reasonable price."
- 1 Drugs Live cannabis trial: Hash is less harmful than any other drug, expert claims
- 2 What happens to your body when you give up sugar?
- 3 Turkish Airlines flight TK 726 crash-lands on Nepal runway in dense fog
- 4 Have sex with your iPad thanks to the new sex toy no-one asked for
- 5 The 'sex selfie stick' lets you FaceTime the inside of a vagina
Turkish Airlines flight TK 726 crash-lands on Nepal runway in dense fog
George Clooney and Amal fail to get special treatment at New York restaurant
Cindy Crawford 'un-PhotoShopped' viral Marie Claire image was doctored, photographer claims
'A girl is more responsible for rape than a boy': The statement that shocked the world... except India
The 'sex selfie stick' lets you FaceTime the inside of a vagina
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Ukip would cut billions from Scottish budget to fund English tax cuts
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
iJobs Money & Business
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...
£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...