Forum Archive Index - July 2000

["David Reid" <aspex@ix.net.nz>]

Guinness Peat on £150m warpath
BY EMMA DANDY

Guinness Peat Group, the active investor run by Blake Nixon, has drawn up a hit list of potential bid targets and claims it has instant access to a war chest of at least £150million.

New Zealand-born Nixon said he has a team of people investigating around 20 "old economy" businesses - worth between £50million and £300million - that GPG may make hostile offers for.

GPG hopes to profit by investing in companies it believes are undervalued and then force through changes to boost the share price.

Nixon declined to name any of his targets but in the past has bought significant shareholdings in companies in the brewing and leisure sectors as well as textiles and other manufacturing businesses.

Worried chief executives need only look at the current battle with John Young, the septuagenarian chairman of family-controlled Young's Brewery. Nixon is in the midst of his third assault in as many years on Young's and is trying to force the Wandsworth, south London, brewer to seek out mergers with its regional rivals.

A vote on GPG's resolution at Young's annual meeting later this month is bound to fail, however, as the Young family has a clear voting majority despite owning fewer than half the shares.

GPG also owns shares in hotels group De Vere, troubled cashmere company Dawson International, textiles firm Coats Viyella, shoe retailer Stylo, former British Salt owner Staveley Industries, and car retailer Inchcape.

17th June:

Trouble brewing for Young & Co

Family-controlled brewing and pubs group Young & Co's Brewery was under assault again yesterday as rebel institutional shareholder Guinness Peat geared up for a fresh attack at its annual meeting, set for July 18.

Blake Nixon, UK head of Guinness Peat, has written to Young's chairman John Young explaining his reasons for the third attack on the company in as many years.

But this year he has added a twist, demanding the board investigate either merging with or taking over rival regional brewers. He argues this will improve the performance of Young's Ram Brewery in Wandsworth, South London, and in turn aid the share price.

Youngs has an old-fashioned share structure which effectively gives control to the Young family, even though the majority of the shares are owned by outsiders. Nixon wants this to be updated.

Last week Young's reported its third successive year of double-digit growth with pre-tax profits up 15 per cent to £8.5million.Emma Dandy 
 
David Reid