Surprise BICC sale damps down Wassall’s ambitions

BICC’s latest cables disposal makes it less attractive takeover target for Wassall

Efforts by industrial conglomerate Wassall to mount a takeover bid took another turn last week after target BICC sold its remaining cables interests.

The surprise £275m disposal to US-based General Cable makes BICC less attractive to Wassall and follows the rejection of its 110p-a-share offer, described by BICC as `too cheap’.

Wassall, which holds 9.3% of BICC shares, said it remained interested in the company but only if the cables businesses sale to General Cable was reversed by shareholders.

Analysts said such a move was unlikely and that the sale spelled the end for Wassall’s aspirations.

Wassall’s chief executive Chris Miller insisted another offer for the company would be made `within days’.

The sale to General Cable will leave BICC focused on its Balfour Beatty construction subsidiary plus one remaining specialist wiring operation and a computerised security systems business.

BICC has been disposing of its cables operations, having sold its optical fibres division in November and the telecoms cables business in February.

Under the terms of its sale to General Cable, which is equivalent to a discount of more than 15% to the cables business’s book value of £325m, BICC will make a net loss of £370m.

This includes a £295m goodwill write-back. BICC will also have to pay back up to £25m of the £275m proceeds to cover any outstanding liabilities in the business.

A spokesman said the sale was a `good price’. He added: `It is an exit multiple of 11 times the business’s pre-exceptional operating profit last year of £25m – that is a lot more than most industrial businesses are fetching at the moment.’

The deal is expected to dilute earnings in the short term until BICC can reinvest some of the proceeds of the disposal.