Chapelthorpe 'best served by going private'

The Swedish businessman, whose mandatory bid for all remaining shares in the Bradford-based company last week valued it at just 5.1m, insisted the 25p a share offer valued the group at a "substantial premium" to its recent share price and was "very helpful" to all other shareholders.

Mr Gyllenhammar invests in poorly valued firms, and has stakes in Yorkshire PLCs including Abbeycrest, 1st Dental and Leeds Group.

Last week, he bought out Chapelthorpe's second-biggest shareholder, Hanover Investments, to give him 54.6 per cent of the manufacturer. However, the 4.2 per cent premium to the closing price the day before his offer was labelled "miserly" by one analyst.

Mr Gyllenhammar was obliged to make an offer for the rest of the company after crossing the 30 per cent threshold.

"In that respect one can well claim that Hanover's sale to me was very helpful to all other shareholders," he said. "The bid represents a substantial premium to the average trading price during the last six and 12 months.

"So if some investors are complaining (about 25p) – where were they when the shares traded at 10p not so long ago?"

His investment firm, Bronsstadet, paid 1.3m for Hanover's 24.8 per cent stake. Acquiring 75 per cent of Chapelthorpe would allow Mr Gyllenhammar to take it private.

Hanover last week said it sold up because it got "stuck" in the AIM-listed company, as having two major holders created an overhang.

Analysts expect remaining shareholders to largely sell up, as it offers them a chance to turn their investment into cash.

Mr Gyllenhammar insisted he is "not confident of anything". "This is entirely up to shareholders to decide and being a firm believer in 'shareholder democracy', this decision must be made, or not made, in accordance with the prevailing rules," he said.

"However, I certainly and firmly do believe that being a public rather than private company is much more of a liability than an asset to Chapelthorpe."

Chapelthorpe, which makes fibres used in cars and carpets, recently returned to profit for the first time in six years and had been planning expansion into fast-growing markets such as India and South America.

Mr Gyllenhammar said turnaround fund Hanover approached him to sell its stake, and the price was agreed in a "willing buyer/seller" discussion.

"The price I paid Hanover, and will now offer to all other shareholders, was agreed between me and a highly professional and knowledgeable investor as the seller."

Hanover's board representative, Tom Russell, yesterday resigned from the group's board. Mr Gyllenhammar plans to replace him with at least another non-executive director, to reflect Bronsstadet's majority stake.

Last year, he used Leeds Group to oust the chairman of Scottish cashmere firm Dawson International, using Leeds's holding in the company.

But he said the situation with Chapelthorpe is "not as acute" as it was with Dawson, although did not say whether Chapelthorpe's chairman Leslie Goodman will play a part going forward.

"As the company is now a subsidiary of Bronsstadet, I believe the board structure should at some point in time and one way or another reflect this," he said

Mr Gyllenhammar added he does not expect a rival bid for the 88m turnover company. Worth an estimated 100m, his strategy is to pick out "bombed out" shares trading at a steep discount to net asset value, then implement change.

He began building his stake in Chapelthorpe in 2006. The company declined to comment.

GYLLENHAMMAR EXPRESSES CONCERN

Peter Gyllenhammar has called on jewellery group Abbeycrest to resolve covenant breaches with its lender, Burdale Financial.

The Leeds-based jewellery firm last week said it has breached profitability covenants with its senior lender, Burdale Financial, a subsidiary of Bank of Ireland. Abbeycrest's finances were strained when the high price of gold dented demand, margins and working capital.

Mr Gyllenhammar, who has just under 30 per cent of Abbeycrest's shares, said it is time for Simon Ashton, the company's executive chairman, to "deliver the gems". "I am not at all happy with the development in Abbeycrest."

Mr Gyllenhammar was speaking from his yacht in the Baltics.