SCI takes a 'strategic' stake in Plantsbrook

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The Independent Online
THE TURMOIL in the UK funeral industry continued yesterday with Plantsbrook, the largest quoted burial business, emerging as the latest target for the takeover rumour mill.

Still celebrating its successful bid for Great Southern, the Texan group SCI acquired 2.95 per cent of Plantsbrook and said it was looking to buy more shares.

Although SCI described the stake as a strategic investment, the benefits of merging Great Southern with another sizeable company could be considerable.

Market sources said the share raid was a reaction to inquiries about Plantsbrook stock from Loewen, the Canadian company pipped at the post for Great Southern by SCI. Both companies want to build a presence in the UK after rapid expansion in North America.

If an auction were to develop, it is thought that Plantsbrook could be valued at up to twice its market value of pounds 100m at yesterday's closing price of 100p. Forecasts for the current year put the shares on a prospective p/e of 13 compared with the exit multiple of 24 at which SCI persuaded shareholders to sell out of Great Southern.

Plantsbrook's market share at 9 per cent is almost twice that of Great Southern. But it is less involved in the lucrative market for pre-paid funerals.

Plantsbrook is 46 per cent owned by Pompes Funebres Generales, a French funeral business ultimately controlled by Lyonnaise des Eaux, the water company.

SCI and Loewen crossed swords over Great Southern after Loewen attempted to have SCI's winning offer blocked by the Takeover Panel. SCI's stake-building in Plantsbrook is seen as a spoiling move to forestall a takeover of the company by the Canadians.

The Takeover Panel threw out an appeal by Loewen that SCI's final bid, which increased its offer from 680p to 775p a share, contravened takeover rules.