Takeover earns NMC chief pounds 2.2m pay-off: Britton rights issue to pay bid costs and cut gearing
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.THE agreed pounds 121m takeover of NMC by Britton Group will give Norman Gordon, outgoing chief executive of NMC, a pounds 2.2m pay-off.
Mr Gordon has a five-year rolling contract and received a 10 per cent increase in salary to pounds 431,970 from last month, when bid talks were already in progress.
NMC has only one non- executive director, the South African-based chairman David Marshall, who has a sizeable shareholding in the company. Britton says Mr Gordon's contract is legally binding.
Robin Williams, chief executive of Britton, said honouring NMC's directors' contracts and advisers' fees would cost more than pounds 3m. However, immediate savings of pounds 1.4m a year will be made through closing NMC's head office.
The fast-growing packaging company wants NMC for the jewel in its crown - UPC, the US folding cartons business. Once owned by Kraft General Foods, UPC has focused on supplying food giants including Kraft, Campbell Soup Company and Heinz. It wants to expand through gaining new customers in food and non-food sectors.
NMC has estimated profits before tax in the year to the end of March at not less than pounds 10m, against pounds 7.1m the previous year. UPC's contribution was greater than the total, but was offset by head office costs and losses in UK businesses, notably Pricemaster, which manufactures and sells self- adhesive labels.
NMC's two other principal UK businesses manufacture security bags and extrude and print polythene film for dry cleaning.
The pounds 121m price gives a true exit multiple of 16.4, which could be brought down significantly through cost reductions, Mr Williams said. Britton is raising pounds 25.7m through a one-for-three rights issue. The proceeds will pay the bid costs and reduce gearing to about 35 per cent.
The terms of the offer are 100 ordinary Britton shares and pounds 4 cash for every 100 NMC shares. There is a 60 per cent cash alternative.
The convertible offer is 28 Britton ordinary shares for 33 NMC convertibles with a 60 per cent cash alternative.
After the acquisition, Britton will be capitalised at about pounds 227m based on the shares' closing price of 161p, down 4p.
Two years ago when Mr Williams and Simon Beart, finance director, abandoned corporate finance at Salomon Brothers to launch the company it was the shell of Firstland Oil and Gas and had no packaging interests.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments