UK trust offloads holding in GPG

The investment trust of British billionaire Lord Jacob Rothschild is believed to have sold shares it inherited as part of Guinness Peat Group's takeover of threadmaker Coats.

It is understood that RIT Capital Partners, a UK-listed investment trust, chaired by Rothschild and part-owned by the Rothschild family, sold $40.9 million worth of GPG shares.

Australian and New Zealand institutions paid $2.12 a share - a 4.5 per cent discount on Thursday's closing price.

RIT was a part of the GPG-led consortium, Avenue Acquisitions, that took over UK company Coats - a global business and the world's largest threadmaker - for $1.1 billion in 2003.

After the takeover, GPG owned 64 per cent of the investment vehicle that owned Coats.

Last May, GPG mopped up the minority shareholders in Coats, including RIT Capital, with the $175 million offer of 1.25 GPG shares and 25p in cash for each Coats share.

The average price of GPG shares last May was $1.97. Friday's sale price of $2.12 was 7 per cent higher.

At the Auckland office of UBS - the sharebroker that sold the shares - managing director Campbell Stuart refused to comment.

Coats is the biggest investment of GPG, the investment company founded by Sir Ron Brierley.

In August, Brierley described the move to 100 per cent ownership of Coats and the associated upfront costs and write-offs as "more painful than originally anticipated".

He said Coats' operating profit rose 85 per cent in the six months to June 30 of last year but was eaten up by refinancing charges and a geographical mismatch of taxable earnings and tax credits for past losses.

He touted January 1 of this year as "a symbolic date when Coats begins a new financial year as a reorganised and fully fledged subsidiary of GPG".

Brierley also spelled out the five stages of "the Coats exercise".

* One: a strategic stake.

* Two: a successful takeover.

* Three: 100 per cent ownership.

* Four: full integration with GPG.

* Five: deliver results.

Sharebrokers seem to think the company will get there - GPG was one of the favourites of brokers polled by the Business Herald on stocks expected to do well in 2005.