Platignum buys Abbey Storage

MAGNUS GRIMOND

Platignum, the pens to housewares group, is set to become the UK's biggest provider of self-service storage after announcing the pounds 24.5m reverse takeover of market leader Abbey Storage.

The group, which plans to change its name to Mentmore Abbey, also announced a pounds 16.5m placing to part finance the deal, the second in six months. Shareholders are now being offered one new share at 6.5p for every two held. The balance of the purchase price is to be met by pounds 8m of debt.

Trading in Platignum's shares was suspended at 8.25p yesterday ahead of the announcement.

The company has been shaken up by chairman Nicholas Smith, who joined from Kimberly-Clark a year ago, following an ill-starred strategy of buying businesses in receivership. In November 1994, the 66 per cent owned Olives Paper Mill offshoot went bust and last April Platignum sold Younger Furniture, a loss-making domestic cabinets business, to management. Trading and disposal losses on those two operations led Platignum to report a deficit of pounds 2.63m for the year to March 1995. In August, chief executive Rob Campbell and finance director David Bridge both resigned.

Subsequently, the group raised pounds 2.1m in a placing and open offer at 4.5p a share and reported a return to the black.