The once mighty Guinness Peat Group, a famed billion dollar corporate raider that could strike fear in the hearts of company directors across three continents, has fallen into the red after being whacked with a 110 million euro ($133 million) fine by a European court.
The loss was announced as one of GPG’s biggest holdings, financial services group ClearView Wealth, received a revised takeover offer of 55 cents per share this afternoon from private equity-led consortium Crescent and which also includes a special dividend of 2.2 cents per share.
The improved offer has won the backing of ClearView’s board as well as GPG which owns 47.3 per cent of the wealth manager and stands to realise $122 million in proceeds if the bid succeeds.
Formerly the plaything of stockpicker Sir Ron Brierley but now in wind-down mode, GPG is looking to dispose of most of its assets after years of underperformance and shareholder disquiet.
GPG said it posted a first-half loss of £36 million ($55 million) due to a bigger than expected fine related to previous wrongdoing at its industrial threads business Coats, with that threads operation also stumbling due to a global downturn in underlying demand for clothing and footwear.
Coats, wholly owned by GPG, was slapped with a fine for market fixing that was considerably bigger than the sum GPG had originally provided for in its accounts. GPG said the provision held for the fine was based on judgments reached after taking external advice.
In his statement to shareholders GPG chairman Rob Campbell said proceeds from asset sales including disposals from its international equities portfolio hit £168 million for the year to August.
It made a profit of £37 million on asset sales, up from £35 million a year earlier. Total proceeds from asset sales since January 2011 now stand at £310 million. Group revenue for the first half fell by £66 million, or 11 per cent, to £533 million.
Mr Campbell said during the first half the company had focused on strengthening its Coats subsidiary for it to be the core of GPG by the end of the financial year, selling investments that had no long term value and setting out a clear plan for its legacy pension schemes linked to its operations.
Coats trading performance in the first half was behind plan and combined with adverse movements in exchange rates. The business saw revenue drop 5 per cent to $US819.3 million to record a first-half loss of $US109.4 million against a profit last year of $US36.9 million in the first half.
At the end of the first half GPG’s investment portfolio was worth £363 million, mostly consisting stakes in listed Australian companies. GPG did not declare a first-half dividend.
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