FS Africa, which is jointly owned by Swiss investor Rainer-Marc Frey and billionaire Thomas Schmidheiny, offered 10.25p per share for the struggling oil and gas logistics provider.
“The company had laudable objectives to capitalise on the growth of Africa, but repeatedly over promised and under delivered,” Damian McNeela, analyst at Panmure Gordon, told City A.M.
“In the context of the company’s overstretched balance sheet and under-delivering on promises, I think they have been offered a fair price.”
FS Africa had net debt totalling £99m at the end of the first quarter.
“We believe Lonrho has strong long-term prospects, but the significant capital required to grow the business over time is evident,” said Schmidheiny.
Lonrho’s shares closed 4.7p, or 90.4 per cent higher, at 9.9p yesterday.
PROFILE: TINY ROWLAND
ROLAND ‘Tiny’ Rowland, who died in 1998, was the man who transformed the firm from a tiny mining firm in Africa to what was at its peak a huge international conglomerate.
Recruited as chief executive of what was then the London and Rhodesian Mining and Land Company in 1962, Rowland led an aggressive expansion of the firm outside its mining comfort zone and refashioned the declining firm as a conglomerate running more than 600 global businesses including newspapers, hotels and textiles. His autocratic management style saw directors challenge his position in 1973, and though he survived the coup, then Prime Minister Edward Heath labelled him “an unpleasant and unacceptable face of capitalism”.
In 1981 he was handed control of the Observer newspaper, but blocked from bidding for Harrods. The decision incensed him so much he used his publishing platform to pursue a lengthy vendetta against Harrods and its new owner, Mohammed Al-Fayed, eventually forcing the DTI into publishing an internal report that questioned the Egyptian tycoon’s source of wealth. Eventually ousted from Lonrho by a second boardroom coup in 1993, Tiny died five years later aged 80.
Even before Lonrho, Rowland led an adventurous life. Born in an Indian detention camp during WW1, Rowland’s early years saw him join the Hilter Youth, work as a shipping agent, and spend eight weeks in a Berlin jail for anti-Nazi sentiment.
Investec Bank advised FS Africa on its lifeline bid for struggling African conglomerate Lonrho. The team was led by David Anderson and Garry Levin, who both previously worked at KBC Peel Hunt. Law firm Slaughter and May also advised FS Africa, led by corporate and M&A partner Mark Zerdin who previously worked on deals such as Liverpool FC’s sale to New England Sports Ventures and General Electric’s offer to buy Wellstream Holdings. Meanwhile Jefferies advised Lonrho, led by MD Sara Hale, Senior VP Harry Nicholas, MD Andrew Bell, VP Vaneet Malhotra and MD Michael Collinson. Hale and Nicholas previously worked at RBS Hoare Govett, while Bell came from HSBC. Headland Consultancy and FTI Consulting were PR advisers to FS Africa and Lonrho respectively.