The Pru opposes Amstrad buyout

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The Independent Online
PRUDENTIAL yesterday waded into a bitter shareholders' rebellion at Amstrad by declaring its opposition to a pounds 113m buyout proposal from Alan Sugar.

The large insurer, which owns less than a 1 per cent shareholding in the electronics group, said it would be voting against a 30p-a- share offer from Mr Sugar to take it private.

The Pru is the second blue chip institutional investor to come out publicly against the buyout. Last week the Independent revealed that Postel, with a 2 per cent shareholding, had rejected the proposal, partly because of the lack of independent advice on the offer from Amstrad.

The group has no non-executive directors and its executive board will continue to hold jobs at Amstrad if the buyout goes through. Its net assets amount to about 46p a share.

However, yesterday's move is almost certain to add further weight to the gathering shareholder rebellion against the proposal. Several other institutional investors are known to be unhappy with Mr Sugar's plan but have yet to make up their minds.

It is understood that Prudential considered Mr Sugar's terms inadequate after a strong rise in the stock market since the offer was first tabled by him.

Some shareholders believe that they could derive better value from an alternative restructuring by Amstrad. One option could be to increase its liquidity further and wait for a payout until next year.

Many small investors in Amstrad have joined a shareholders' club to vote against the plans at an extraordinary meeting to be held next Thursday.

The pressure group has already received backing from shareholders who speak for 2 million Amstrad shares. The dissidents require at least 97 million shares to block the plans.

Amstrad shares were unchanged at 28p yesterday.