UKAV to buy 65% share in Mansfield

Julian Treger and Brian Myerson, the scourge of underperforming managements through their UK Active Value vulture fund, are to stop telling others how to run their business and do it themselves.

After a sequence of high-profile rebel shareholder campaigns at Scholl, Greycoat and Signet, the South African entrepreneurs have bought into a stock market shell to use as an acquisition vehicle.

UK Active Value yesterday announced a pounds 5m subscription to new shares in John Mansfield, a quoted timber business with a market value of just pounds 3m. Following the share purchase UKAV will hold 65.4 per cent of Mansfield's shares.

The deal is expected to be followed within months by sizeable acquisitions of undervalued companies. Targets are already in place with the first purchase thought likely to cost around pounds 250m. Acquisitions will be funded with a mixture of cash and shares.

The subscription for the shares is to take place at 3p a share, a small discount to the prevailing price at the time negotiations started between the company and UKAV. Yesterday's announcement, and the appointment of Mr Myerson and Mr Treger as joint chairmen, sent the shares up from 5.5p to 8p.

The acquisition of John Mansfield marks a departure from UKAV's confrontational style which has been criticised as no more than corporate raiding. Since 1993 it has picked on underperforming stocks, built up a stake, put the squeeze on management and forced through a sale or break up to release value. Now it must prove it can practise what it has preached.