Suter agrees to pounds 270m Ascot bid

Click to follow
Suter, the diversified industrial group run by former share-dealing whizz- kid David Abell, will announce today that it has agreed to a pounds 270m bid from Ascot Holdings, the property and leisure group previously known as Control Securities.

Suter's shares jumped 27p to 197p yesterday after it emerged that the company was in talks that might lead to a bid. Later in the day Ascot confirmed that it was the potential bidder and its shares fell 8p to 361p. A bid of about 230p a share is expected to be recommended today.

Ascot, which changed its name in 1993 as it sold off its brewing, hotels and property interests to become a cash-rich shell, was originally run by Nazmu Virani, the Ugandan Asian businessman who built a pounds 100m personal fortune from nothing but ended up in jail for his part in the BCCI banking fraud.

Howard Dyer, former boss of the Hamleys toy store, then moved to the group with the stated intention of using Ascot's shares and cash to acquire an industrial group.

A former employee of Williams Holdings, Mr Dyer is expected to use Suter's businesses, which include refrigeration, engineering and chemicals operations, as the launchpad to build a much larger group.

He is understood to be keen to increase the focus of the group to take it away from the out-of-favour diversified industrials sector where companies such as Hanson, BTR and Tomkins have been shunned by investors. Williams itself narrowed its focus several years ago to concentrate on just three core businesses.

Suter, a conglomerate twice the size of Ascot, is run by Mr Abell, who made a fortune in the 1960s and 1970s trading shares, and who is more used to taking stakes in other companies than being under siege himself.

Since the early 1980s a long roll-call of companies have found Suter on their share register. Sometimes the stakes led to bids, but more often not. Always controversial, Mr Abell was at the centre of a four-and-a- half year investigation by the Department of Trade and Industry which led to a DTI criticism of him but no action being taken.

It is thought that his reputation as an inveterate share-dealer has played a large part in Suter's indifferent stockmarket rating in recent years.

If, as expected, Suter recommends an approach from Ascot worth about 230p a share today, Mr Abell's 3 per cent stake will net him pounds 9m. Although the deal is being portrayed as a merger, it is thought unlikely that he will play an active executive role in the combined group.

After a patchy record in the early 1990s, Suter has grown steadily since 1992 when it made profits of pounds 16.3m.

Profits of pounds 29m are forecast for the year ending in December. Analysts have said that a fair value for the group was over 200p, but it has only rarely traded above that level in the past five years.

A bid from Ascot would mark the end of Mr Abell's 18-year association with the former Suter Electrical, a maker of salon hairdrying equipment, which he bought into in 1978 while still working for British Leyland where he had built his early career. Treasurer of the state-owned car maker at just 29, he joined the main board only three years later.