Conflict seen for Guinness

Press, 24 September 1988, Page 34

Conflict seen for Guinness

By

TONY VERDON

in London Merchant bank, Singer and Freidlander, and Italian entrepreneur, Carlo de Benedetti, are two of the parties who have reportedly shown interest in buying Equiticorp’s 61 per cent stake in merchant Bank, Guinness Mahon. But they may come into conflict with the existing management of the merchant bank, which has ideas of its own for the firm’s future. The chairman, Mr Geoffrey Bell, has been offered funds for a management buy-out, although he said this week that such a solution would not meet with Bank of England approval. He would probably prefer a single supportive shareholder with strong management equity involvement. Meanwhile, potential buyers are frustrated by the lack of information available to them, according to the London “Evening Standard.” A spokesman for Singer and Friedlander, Mr Tony Solomons, said his firm had said that if somebody produced the information it wanted to look at it. “But it is impossible from just the published information to make a judgment,” he said. The "Standard” said Equiticorp was clearly keen to make the sale, but it was likely there was a difference of view between itself and the board of Guinness Mahon as to how the sale should be carried out. Mr Bell told the “Standard” that the board had no intention of selling the bank. “It is a stake that is changing hands,” he said. He refused to “give privileged information to any interested party that is not available to all shareholders.” Mr Bell was angered by suggestions that he was not being fully co-operative with buyers interested in the Equiticorp stake. “It is a bank we are talking about, not a widget company.” The “Standard” said it was always likely that at some stage the Guinness Mahon board would find itself in conflict with Equiticorp, whose interest was to get the best possible price for its stake. While Equiticorp wanted to sell all of its interest in Guinness Peat, which it acquired just before the crash last year, the merchant bank part, Guinness Mahon, came top of its list of priorities.

The “Standard” said the sale of the Guinness Peat group, the other half of the recent demerger, must wait upon the sale of GPG’s stake in Guinness Peat Aviation.