Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

Ferranti rebels to fight GEC 1p bid

Mary Fagan
Sunday 14 November 1993 19:02 EST
Comments

Your support helps us to tell the story

From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.

At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.

The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.

Your support makes all the difference.

A GROUP of aggrieved Ferranti shareholders is seeking to raise pounds 30,000 to contest the penny-a-share takeover bid for the ailing electronics company by GEC, which values Ferranti at about pounds 10m. GEC will also absorb about pounds 140m of debt as a result of the deal.

The newly formed Ferranti Shareholders Support Association is aiming to get the backing of 10 per cent of shareholders. John Katz, an investment consultant leading the association, believes that it could achieve an effective negotiating position with shareholder support of 5 per cent.

In the offer document for Ferranti, issued yesterday, GEC said it would not proceed with the bid unless 90 per cent of shareholders accepted, allowing GEC to acquire compulsorily any outstanding shares. Mr Katz had asked that GEC limit its holding to allow some shareholders to gain from Ferranti's future recovery.

Meanwhile, Ferranti warned in the document that the only alternative to GEC's bid was receivership and the loss of many thousands of jobs at Ferranti and among its suppliers. The company estimates that up to 4,000 jobs are indirectly at risk in addition to the Ferranti workforce of around 3,000.

Mr Katz attacked the issue of jobs as a 'public relations football' and said that GEC would in any case trim operations and rationalise. In the document, GEC says it will maintain the fullest employment that can be economically justified.

At the same time, it has emerged that under his terms of employment, Eugene Anderson, Ferranti's chairman, stands to gain two years' salary on notice. The prospective payoff, worth almost pounds 1m, is likely to fuel the anger of shareholders. However, GEC has not commented on whether the service contracts of Ferranti directors will be honoured.

The offer document warns shareholders that banks will not continue to lend to Ferranti if the GEC offer fails, and that the company's stark financial position has already damaged its ability to get new business.

It says that Ferranti considered a rights issue as an alternative way out of its problems, but the board concluded that it would need to be too big to be practical. The notion of a 'firesale' of remaining businesses was also considered and rejected.

Mr Anderson has acknowledged that some shareholders are dismayed by the terms of the GEC offer, but repeated yesterday that it was nevertheless vital they accept.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in