The Investment Column: Laporte

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The Independent Online
AT FIRST glance, Laporte's decision to scrap its interim dividend and distribute the pay-out via redeemable B shares looks a poor deal for shareholders. They will receive a slightly reduced pay-out of 9p and will have to wait longer for their cash even though Laporte will cover the timed value of money with an interest payment. At least the ruse will save the company pounds 25m in tax that can be re-invested in the business.

This made Laporte's half year figures something of a sideshow yesterday. The warm air currents under the company's share price have been provided by takeover speculation following on-off talks with the Swiss group Clariant. Analysts reckon Laporte shares are worth around 600p on fundamentals, compared to yesterday's 749p, down 35p on the day. On full year forecasts of pounds 133m the shares trade on a forward rating of 15. The stock has almost doubled since October and though sentiment has improved towards chemicals recently, there should be more uplift on the trading side..

Whilst the shares are looking overvalued, they may appeal to investors willing to gamble that Laporte is worth more to the next interested party.