UNIGATE shares climbed 15p to 357p as the group confirmed its purchase
of distribution specialist Glass Glover which comes just days after its
agreed #50m cash bid for Clifford Foods and its #17m purchase of some
Co-op milk operations.
Glass Glover had been about to come to the market when Unigate stepped
in with its offer of #54m. A valuation some #10m less than this was
projected under the flotation. The company had been the subject of a
#47m management buy-out in 1988.
Unigate's three purchases this month will push its gearing over 60%
but no rights issue is planned
because further disposals will reduce it. In particular, the group is
considering floating its successful American restaurant interests under
the Black-Eyed Pea and Taco Bueno names. This raised its profits by
13.5% to #8.4m in the six months to last September and it should make
around #15m for the full year. So it would command a good price, easily
enough to pay for this month's purchases.
Glass Glover operates in the same market as Christian Salvesen, run-
ning warehouses and distribution networks for major retailers like
Littlewoods, Asda and Tesco. It will fit in with Unigate's existing
Wincanton Distribution Company. In its last full year, the latter made
trading profits of #11.4m, which compares with Glass Glover's #5.5m.
The shuffling of assets at Unigate began with the arrival of Ross
Buckland as chief executive in 1990 and activities disposed of have
included J.P. Wood poultry, an American cheese business, and Giltspur
exhibition organising. The idea is to concentrate on food and
distribution to leading retailers.
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