His decision to sell will spark a serious row among the group's other shareholders as Mr Rowland, 75, is selling 43.2 million shares at 115p a share, which will add pounds 50m to his personal fortune. This compares with the group's share price, which closed at 79p yesterday, up 5p.
With a significant new shareholder appearing on the scene, speculation will be rife about the future of the company and who will succeed Mr Rowland.
In other surprise moves he intends to attempt to raise up to pounds 181m from shareholders to reduce the borrowings of his troubled trading empire, which earlier this year were over pounds 1bn. Lonrho intends to issue three new shares for every ten at a price of 85p to raise the cash.
In the rights issue plan, a Dutch company owned by Mr Bock, 53, will underwrite up to 100 million of the new shares and will purchase Mr Rowland's 43.2 million shares. He has also given Mr Bock an option to acquire a further 45.5 million shares of Mr Rowland's personal stake after a period of three years or, if later, when Mr Rowland ceases to be a director. Mr Bock's business interests, if they take up their shareholding fully and purchase a further block of Mr Rowland's shares, could emerge eventually with a 25 per cent holding in Lonrho and leave Mr Rowland with a holding of around 3 million shares. Until these latest developments Mr Rowland held around 14 per cent in Lonrho.
In further efforts to reduce Lonrho's debt, Mr Rowland announced that he was selling the group's Volkswagen and Audi vehicle distribution company to Volkswagen of Germany for pounds 124m.
Lonrho said that they intended to invite Mr Bock to become a director of the company but Mr Bock said last night 'whether I would join the board cannot be decided yet.'
Mr Bock, who qualified as a lawyer in Frankfurt in 1970, said: 'I am not interested in taking over Lonrho. I became interested in Lonrho a year ago when I decided that the shares were undervalued and the value of the company was at such a low level. I tried to find a way to meet Lonrho on a personal basis. I met Mr Rowland at the group's headquarters three months ago.'
As Mr Bock became the latest character to play a part in the uncertain future of Lonrho, the company announced that its profits for the financial year ended in September had slumped from pounds 205m to pounds 79m. The full dividend payout is to be cut sharply from 13p to 4p a share.
The group has decided that intangible assets, such as its Observer newspaper title, led to an extremely 'subjective' valuation and has concluded 'that there is no benefit of keeping such assets in the balance sheet. Accordingly the board intends to eliminate intangible assets in the financial statements for the year ending 30 September, 1992.'
Mr Rowland, explaining the moves in a letter to shareholders, said the sale of his shares to Mr Bock through Mr Rowland's private investment company was 'the first time any have been sold for over 30 years. Believe me, it is only my age which occasions this.'
He added: 'Mr Bock has followed Lonrho's growth for many years. He is truly interested in the company and is making a large investment in Lonrho. I sincerely hope that Mr Bock will join the board of Lonrho should he be satisfied that his commitments permit him to do so after the rights issue is concluded.'
Explaining the controversial price at which he is selling his shares, Mr Rowland said: 'I do not believe that there is an unfair advantage since neither my company nor I has ever dealt in Lonrho shares other than to buy them . . . I hope shareholders will take up their rights.'
According to Mr Rowland, Mr Bock has established a formidable property porfolio that includes properties in Europe and South Africa. It includes 50 per cent of the Kempinski chain of 18 hotels. 'He has substantial interests in and knowledge of Eastern Europe,' he said.
Mr Bock, asked whether he thought Mr Rowland, at 75, was too old to continue as chief executive of Lonrho, said: 'No. He is quite tough.'
Over the past year or so Lonrho has had discussions with Gencor, the South African mining house and Genting, the Malaysian casino operator, in an abortive attempt to do deals that would relieve Lonrho's financial position.
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