Outlook: Lewinton magic

SIR CHRISTOPHER Lewinton seems to have pulled off a master stroke in attracting Kohlberg Kravis Roberts on to the TI share register, and Henry Kravis on to its board. Finally an investor with international credibility has recognised the value to be had from Britain's unloved engineering sector, and backed his judgement with real money. The effect was immediate and electric - TI shares climbed 8.5 per cent yesterday.

Sir Christopher's friendship with Mr Kravis goes back to the mid-1980s, when he bought some companies from KKR and moulded them into the former Tube Investments. They've stayed in touch ever since, so Sir Christopher was intrigued and delighted when Mr Kravis approached him requesting an investment in the company.

KKR is getting in at close to the bottom for TI's share price, and Sir Christopher admits that he doesn't particularly need KKR's money. So why is he diluting other shareholders in this manner?

The reasons are twofold. The mere fact that Henry Kravis believes TI to be undervalued, and publicly states it with a near pounds 100m investment, is bound to make others think there may be something worth having there after all.

The second is KKR's global intelligence network, which ought to provide a ready source of appropriate international acquisitions. Sir Christopher and his other shareholders need to watch it, of course. Mr Kravis is one of the world's most accomplished "vulture capitalists", and he'll find some way of demanding his pound of flesh.

But while his mere presence on the share register brings such sparkle to the share price, nobody is going to complain too much, and if he succeeds through his interest in breathing life back into the bombed-out UK engineering sector, we can only applaud.

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