CREDIT Lyonnais is expected to sell its stake in Woodchester as part of the French bank's restructuring plans. The bank's latest restructuring plans are aimed at achieving approval from Brussels for the injection of fresh State funds into the troubled bank.
Bid speculation pushed Woodchester shares up to 236p this week - their highest level since - 1988 - as the market took the view that it is now only a matter of time until the Credit Lyonnais (CL) stake changes hands. The shares ended the week at 235p, putting a market value of £262 million on the CL stake.
GE Capital is seen as the most likely buyer of Credit Lyonnais 53 per cent stake in Woodchester.
Other possible bidders include AT&T Capital Corporation and Lombard North Central/NatWest Group.
GE Capital, which has an international lease portfolio of just under $17 billion (£10.4 billion), is understood to have made an approach to Credit Lyonnais some months ago to discuss the Woodchester stake. The buyer of CL's 53 per cent stake may have to make a full bid for Woodchester, pushing up the cost of the deal up to about £500 million.
Institutions hold about 36 per cent of Woodchester's shares, while the directors own 2 per cent of the group.
At a share price of 235p the company is valued at about 2.35 times forecasted end 1996 net assets. In recent months buyers trying to build market share in Britain have paid-up to 2.8 times book value for leasing operations.
While Credit Lyonnais may be holding out for a higher price, one market source said he would not expect anyone to pay more than 250p per share, a price which would value Woodchester at £530 million.
There has been speculation about the future of Credit Lyonnais's stake in Woodchester for some time as the French bank dealt with heavy losses caused by reckless expansion during the past decade.
In 1995 the European Commission sanctioned a French government plan to put up to 45 billion francs (£5.1 billion) into the bank.
But the approval was conditional on the sale of one third of the bank's assets.
Last September the Commission approved emergency aid of 3.9 billion francs to avoid a half year loss of some 1.1 billion francs which would have threatened the bank's viability.
Credit Lyonnais is now seeking approval for a further restructuring involving a capital injection from the government of up to 16 billion francs. But the European Commission is expected to insist on further asset sales by the bank, particularly a reduction in assets held outside France.
Credit Lyonnais' chairman, Mr Jean Peyrelevade, has submitted the bank's latest restructuring plan to Brussels. While sources said that Woodchester was not included in the assets listed for sale in the plan, they commented that this in no way ties his hands from making profitable disposals".
Ms Nicola Horlick, the suspended, former head of British pension fund business at MGAM, said yesterday she would seek compensation for loss of office if Deutsche Bank refused to reinstate her and is contemplating legal action.
"Reinstatement would be a preferred option," she commented after an impromptu trip to Frankfurt to seek a meeting with Deutsche Bank executives.
"An amicable settlement would be the other, if they feel they really cannot give me my job back. In that case I would have to be compensated for my loss of office.
Ms Horlick had a two-hour meeting with a senior Deutsche Bank lawyer and a senior representative of its human resources division. Details were not disclosed but Ms Horlick said she believed she had had a "fair hearing."
She said later she was "upset" to hear that Deutsche Morgan Grenfell described the meeting as only a "courtesy".
