22/06/1990

Lord Rothschild’s cliffhanger for Anglo Group

A WEEK after turning J Rothschild Holdings inside out, Lord Rothschild is doing the same to Anglo Group. The company created last year as the new parent of Anglo Leasing, is now selling the leasing subsidiary, leavings itself cash and an indirect stake in food group Ranks Hovis McDougall.

This move is so drastic that Anglo loses its Stock Exchange listing – though shocked shareholders can do little about it. Share dealings were suspended yesterday, and may never return. The accompanying chart shows Anglo’s 18-month spin since it became the vehicle for the adventures of the then Jacob Rothschild and Sir James Goldsmith. Sir James’ General Oriental bought half the 77 p.c. stake owned by J Rothschild and its demerged brother, RIT Capital Partners. Anglo bought 35 p.c. of Sunningdale, which acquired 29 p.c. of Ranks; then its Hoylake subsidiary bid £13 billion for BAT Industries.

Not bidding for Ranks has proved as expensive as bidding for BAT: the £79m share stake supports £88m of rolled-up debt, now to be repaid from Anglo Leasing’s £120m sale proceeds.

The buyer is Summit, a private company formed in 1985 to buy Aurit Services from – J Rothschild Holdings. Aurit, another financing company, was founded by ex-Anglo director Barry Sack and Summit’s investors include Hoylake backer, General Electric Company, and BAT’S Eagle Star subsidiary.

The 29 p.c. of Summit owned by British & Commonwealth is now being spread among existing investors who are financing Summit'’ purchase: GEC ends up with 46 p.c., a holding with no obvious connection to the rest of GEC’s businesses. Anglo receives half the cash on completion, and half next March. After paying its debts, it is worth £158m, less £50m of bonds outstanding, or 296p a share, against the 173p suspension price. Sir James and Lord Rothschild promise to reveal their plans by July 25. They could bid for Anglo, inject an existing business to regain the listing, or take it abroad. They could sell the Ranks Hovis stake, bid for the rest, or simply hand the shares to Anglo investors.

Who knows? Certainly not the duo’s increasingly disillusioned fan club who have now served their purpose.