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Tuesday, 16 October, 2001, 15:44 GMT 16:44 UK
Fortnum & Mason returns to private hands
Fortnum and Mason website
Fortnum and Mason's hampers are a byword for luxury
Upmarket grocery store Fortnum and Mason is to return to private hands after more than 60 years.

The store, in London's Piccadilly, famed for its Christmas hampers, is being bought out by the Weston family, which already owns 89.9% of the company.

The news will come as a relief to Fortnum's long-suffering shareholders which have seen their investment take a pounding in recent years.

The move has been prompted by the UK Listing Authority, which in March asked Fortnum to do something about the fact that less than 25% of its shares are in public hands.

This situation meant the remaining stock holders had poor liquidity and there were only limited opportunities for shareholders to realise their investment.

The buy-out comes just three months after the Weston family, through its Wittington Investments arm, bought upmarket store group Heal's in a 33.1m deal.

Attacks affect trade

Fortnum and Mason was founded in 1705 and has been a fixture on the London Stock Exchange since 1939.

It said trade had been badly affected by the 11 September attacks, which have led to a 13% fall in custom compared to the same period last year.

The Weston family, which also has a large stake in Associated British Foods, will mop up the remaining shares in the company at a price of 600p each, valuing the company at 57.4m.

Fortnum and Mason shares leapt 65%, to close on Tuesday at 585p.

The shares had not closed above 540p since August 1998.

Guy Weston, chairman of Wittington Investments, which owns the store, said: "Fortnum and Mason is not realising any material benefit from its listing and we believe a large number of minority investors would welcome the opportunity to sell their stock for a good price."

Growing list

Fortnum and Mason joins a growing list of companies seeking to return to private hands as market conditions worsen.

Last November, Norfolk turkey magnate Bernard Matthews bought his family business back after 30 years, in a 232m deal.

More recently, store chain Oasis received approval from its board to return to private hands.

Newcastle United football club was also reported to be considering de-listing, after consistently poor performance from its shares.

Directors Douglas Hall and Freddie Shepherd together own more than 50% of the club, making a return to private hands relatively straightforward, as in the case of Fortnum.

"Attractive Route"

Fortnum's independent director John Lithiby recommended the deal to shareholders, saying the proposal gave shareholders an "attractive route" for realising their investment.

Wittington Investments said did not wish to sell its stake, but had considered other options - including a move to Alternative Investment Market.

It concluded that the best route would be to buy the remaining stock.

For the year to July 14, Fortnum and Mason reported profits of 2.3m on sales of 41.6m.

See also:

20 Jul 01 | Business
Heal's sold to food magnates
29 Mar 01 | Business
Firms admit impact of foot-and-mouth
01 Oct 01 | Business
Newcastle 'to go private again'
04 Sep 98 | The Company File
Fortnum hit by Asian turmoil
13 Jul 01 | Business
Managers on course for Oasis buy-out
20 Nov 00 | Business
Bernard Matthews wins back company
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