GPG backs into Brunel

Sir Ron Brierley's Guinness Peat Group will get its hands on a big bundle of tax losses by merging with Britain's Brunel Holdings.

GPG yesterday revealed plans for a reverse takeover of Brunel, a manufacturer of tobacco processing equipment.

Sir Ron described the implications of the merger for GPG shareholders as "negligible in the short term, but the longer-term benefits should be considerable".

The deal is subject to approval from the courts and shareholders of both companies.

GPG hopes the new company will be underway by mid-December.

Brunel directors will resign and the GPG directors take over.

Under the proposal, each GPG shareholder receives one new Brunel share for each GPG share, giving them 98.6 per cent.

The rest will be held by existing Brunel shareholders and the DLG Group to satisfy a £1.5 million ($4.8 million) loan.

Said GPG: "The merger will enable the shareholders of both companies to obtain the enhanced value of GPG's ongoing activities being conducted through Brunel's existing tax and administrative structure."