Ashcroft in pounds 282m bid for Corporate Services

Francesco Guerrera
Thursday 01 April 1999 23:02

MICHAEL ASHCROFT, the controversial deal-maker and Conservative Party treasurer, made a spectacular return to the City scene yesterday with an audacious bid of up to pounds 282m for the crisis-ridden recruitment group Corporate Services.

However, Mr Ashcroft's attempt to win control of CS suffered a major blow after three major shareholders opposed the bid and pledged to press ahead with plans to remove most of the company's board.

Mercury Asset Management, M&G and Schroders, which own a total 31.5 per cent but could control up to 50 per cent of CS, are believed to have rejected the bid, which is conditional on the current board remaining in place and would scupper their attempts to replace the chairman, Jeffrey Fowler and four other directors.

The CS board advised shareholders to take no action and said it would meet Mr Ashcroft next week to discuss the offer.

The recruitment company's share price has collapsed from a 12-month high of 261p after two profit warnings last month. It closed 21p higher at 94.5p yesterday, boosted by the bid.

Mr Ashcroft, a Florida-based tax exile, used an intricate web of offshore companies and complex financial engineering to mount the cash-and-paper offer.

The Conservative fund-raiser, who made pounds 150m from the sale of his security and car group ADT to the US group Tyco two years ago, mounted the offer through New Carlisle, a newly created company to be listed on London's Alternative Investment Market.

New Carlisle's bid is pitched at between 87.7p and 120p for each CS share, valuing the whole group at between pounds 206m and pounds 282m. The final value of the offer will be determined after an pounds 80m rights issue by New Carlisle.

Outlook, page 21

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