Horace Clarkson rejects buyout
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Your support makes all the difference.SHARES in Horace Clarkson slumped 7p to 65p after the shipping and insurance broker announced that it had turned down a proposed management buyout at its subsidiary, Holman Wade.
As a result, Michael Wade and Sir Peter Parker, the former British Rail chief who had led the buyout, have resigned from Clarkson's board.
The buyout plan was first proposed to the group last October but the two sides could not reach an agreement over price.
Sir Peter, a member of Clarkson's board for 22 years, was expected to become Holman's chairman. But the pair decided that they could not continue at the group after the bid failed.
Michael Beckett, a group director, said: 'Negotiations have been broken off because the terms being offered for Holman were not in the interests of the group's shareholders.'
Mr Wade, who was Holman's chairman, has been succeeded by Patrick Barr.
The buyout proposal came at a time of tough trading conditions at Holman, a Lloyd's market insurance broker. The subsidiary is expected to report a significant loss for 1992.
Holman specialises in placing stop loss cover for Lloyd's investors. However, the heavy losses incurred by the names in 1988 and 1989 had made it difficult to find stop loss insurance, leading to a drop in brokerage income and higher costs of servicing their claims.
Last October, the group reported a collapse in taxable profits from pounds 6m to pounds 1.5m for the half- year to 30 June, on turnover down from pounds 24m to pounds 20m.
The interim dividend was slashed to 0.5p from 2.75p while earnings slipped from 15.7p to 3.5p a share.
The results were also affected by weaker freight markets, pushing ship broking profits from pounds 1.6m to pounds 1.2m.
At the time, the company said that it had held on to market share, but the value of business handled has declined.
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