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Gardner chief faced questions over leak

William Gleeson
Wednesday 12 October 1994 18:02 EDT
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GARRY HAWKES, chief executive of Gardner Merchant, the contract caterer, has been questioned by a Stock Exchange team investigating the leaking of price-sensitive information about a competitor's plan to buy a US catering company.

The investigation took place in May after the competitor, Compass Group, was forced to make an announcement confirming plans to buy Canteen Corporation for pounds 300m and a pounds 150m rights issue to fund the deal at the end of April.

Mr Hawkes said the investigators, who visited Gardner Merchant's London headquarters, asked how he came to know about Compass's plan. Mr Hawkes said he told the exchange it was 'common knowledge in the US'. He had heard of Compass's plans from Gardner Merchant's US employees.

Mr Hawkes said that no more had been heard from the exchange since the May visit.

He confirmed that Gardner Merchant's plans for a stock market flotation were still on hold. The company had originally expected to come to market this autumn. Mr Hawkes said: 'There is no pressure from investors to float.'

The company was the subject of a management buyout from Forte early last year.

Gardner Merchant yesterday reported a 13.7 per cent increase in first-half profits before interest and tax of pounds 26.9m.

However, analysts were surprised the company refused to reveal the interest cost of its pounds 220m of debt. One said: 'They were long on narrative and short on figures. They played their cards close to their chest.'

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