Waterford pays Doulton GBP 4.2 million

Waterford Wedgwood has paid GBP 4.2 million to maintain its shareholding in Royal Doulton in the wake of the ceramics company“s GBP 19 million rights issue, unveiled in March. Waterford Wedgwood had …

Waterford Wedgwood has paid GBP 4.2 million to maintain its shareholding in Royal Doulton in the wake of the ceramics company“s GBP 19 million rights issue, unveiled in March. Waterford Wedgwood had failed narrowly to use its 21.2% stake in Royal Doulton to block the management“s attempt to complete a three-for-one rights issue at 8p a share. The luxury ceramics and crystal group was then faced with the threat of seeing its holding in Royal Doulton diluted to 5% if it refused to take up its rights. After three weeks of deliberation, Waterford opted to maintain its holding, although the company insisted that its alternative proposal designed to help Royal Doulton to get back on its feet still stood. Richard Barnes, the finance director of Waterfood Wedgwood, argued that Royal Doulton“s recovery plan, which involves switching production of the Royal Albert range to Indonesia, had a “good chance of working”, although it carried “significant risks”. Barnes added: “If Royal Doulton succeeds, the value of the company will improve, as will the value of our investment.” He said that if Royal Doulton recovered from its current woes, it would become a more attractive takeover proposition to rivals, thereby reinforcing the defensive nature of Waterford Wedgwood“s stake. Mr Barnes said: “We do not want another ceramics competitor to rival us in term of size and international spread.” Waterford Wedgwood has built up its stake in the Stoke-on-Trent company since November 1999. Waterford Wedgwood said that although the Royal Doulton restructuring proposal was “workable”, the plan to move production of English fine bone china offshore was risky. Regardless of whether Waterford Wedgwood took up its rights, Royal Doulton was assured of receiving the cash, because the issue was underwritten by Cazenove.