US giant takes over CTR in pounds 118m deal

GE Capital, the giant US equipment management-to-financial services group, yesterday announced the pounds 118m agreed takeover of Central Transport Rental (CTR), the heavily indebted trailer rental group formerly called Tiphook.

The deal marks an end to CTR's turbulent and controversial history. Tiphook was a 1980s success story under founder Robert Montague, and become one of Europe's largest trailer rental groups. But the stock market darling turned stock market dog in the 1990s and the group almost collapsed under a mountain of debt.

Mr Montague, who lead a lavish lifestyle while in charge of Tiphook, left the group in disgrace in 1994, the day before he was declared bankrupt with personal debts of more than pounds 35m.

Tiphook's bankers installed a new management team headed by Ian Clubb, chairman, and David Howell, finance director, who have been credited with reviving the group over the last two years.

Mr Howell has got his reward yesterday. He will make an instant profit of pounds 150,000 when the deal goes through by exercising 2 million share options granted last December. Mr Clubb does not have share options and looks set to leave the group.

Christopher Mackenzie, vice president of GE Capital, said: "We looked at this business two years ago and decided not to proceed. But this business has changed dramatically thanks to its new management team. Much as we would like to we can't keep Mr Clubb. He is likely to pursue his interests at First Choice [the tour operator where he is a director]."

GE Capital plans to merge CTR with TIP Europe, its existing trailer rental business, to create a pan-European operation. "We are strong in France, they are strong in Germany," said Mr Mackenzie. But he admitted there would be an overlap of the businesses in the UK and declined to elaborate on how many UK redundancies the deal would involve.

Analysts believe the cash-strapped CTR was desperate for a partner so it could push ahead with its investment plans.

GE Capital has agreed to pay 16p for each CTR share, representing a premium of 129 per cent to Monday's closing price of 7p. The US group will also have to pay back more than pounds 230m of CTR's debt on completion of the deal.