Tiphook containers to raise 830m pounds: Transamerica pays 'staggering' price - Transport group slims down to trailers to avoid collapse

TIPHOOK, the debt-laden transport leasing group, confounded its critics yesterday by selling its container division to Transamerica of the US for pounds 830m, a price far in excess of market expectations.

The proposed sale is conditional on due diligence and the agreement of Tiphook's lenders and shareholders. If it goes through, it will reduce the group's aggregate debts to less than pounds 400m, and leave the company with an opportunity for recovery through its trailer and railway carriage businesses.

Observers said the deal was a remarkable escape from oblivion for the crisis-ridden group and its controversial chairman, Robert Montague. Most analysts were staggered by the price Transamerica was prepared to pay for the containers, which have a book value of between pounds 500m and pounds 600m. 'By my calculation, Transamerica is paying the equivalent of dollars 2,400 per container,' said Adam Moskowitz, an analyst at BDS Securities in New York. 'They could have bought them new for that.'

Chris Kane, of Salomon Brothers, said the price was 35 per cent higher than the most optimistic expectations. 'I guess Transamerica is taking the view that it's worth paying that much for market share and to have the assets on board for a recovery in world trade.'

The news cheered shareholders and the holders of dollars 700m of Tiphook bonds in the US. In London, the shares, which have been in free fall in recent weeks, recovered from 44p to 63p. In New York, the company's American Depositary Receipts, which comprise three ordinary shares, rose dollars 1.50 to dollars 3. The bonds, which were trading at less than 60 per cent of par value, jumped to 80 per cent.

But observers were cautious about the prospects for a slimmed- down group. 'It appears to be a very good deal for the banks, which will get all their money back,' said Richard Bernstein, an analyst at City Marketing.

'But the container division made 97 per cent of the group's profits before tax and exceptional items last year. Trailers made just pounds 3m, so the position is less clear for shareholders and bondholders.'

Sources close to Tiphook suggested that the price reflected competition to buy the business and pointed to a clause in the agreement that requires Tiphook to pay Transamerica compensation of pounds 20m if the deal falls through and the containers are sold to a third party.

Other potential bidders for the assets included GE Capital, the giant US corporation, whose subsidiary, Genstar, is the world's biggest container-leasing operation.

The deal will spring Transamerica into second place globally, with about 950,000 units compared with Genstar's 1.2 million.

Dick Olsen, a Transamerica vice- president, said the US group was paying a fair price for the containers. 'The important thing to stress is that we're buying just the assets, not the business as a whole.'

But analysts pointed out that the assets will come with existing customers, so Transamerica will immediately get the cash flow from the containers that are rented out - about 80 per cent of the fleet.

A Tiphook spokesman said a circular would be sent to shareholders by the end of the year giving more details of the structure of the new Tiphook. It was hoped that the deal could be concluded in January, following a shareholders' meeting.

He added that there would be management changes, and that the search for a new chief executive was being intensified, but Mr Montague would remain chairman.

View from City Road, page 22

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive / Foreign Exchange Dealer - OTE £40,000+

£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

Day In a Page

The long walk west: they fled war in Syria, only to get held up in Hungary – now hundreds of refugees have set off on foot for Austria

They fled war in Syria...

...only to get stuck and sidetracked in Hungary
From The Prisoner to Mad Men, elaborate title sequences are one of the keys to a great TV series

Title sequences: From The Prisoner to Mad Men

Elaborate title sequences are one of the keys to a great TV series. But why does the art form have such a chequered history?
Giorgio Armani Beauty's fabric-inspired foundations: Get back to basics this autumn

Giorgio Armani Beauty's foundations

Sumptuous fabrics meet luscious cosmetics for this elegant look
From stowaways to Operation Stack: Life in a transcontinental lorry cab

Life from the inside of a trucker's cab

From stowaways to Operation Stack, it's a challenging time to be a trucker heading to and from the Continent
Kelis interview: The songwriter and sauce-maker on cooking for Pharrell and crying over potatoes

Kelis interview

The singer and sauce-maker on cooking for Pharrell
Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea