Skirmishes with Nabisco and Pepsico which owns Walkers crisps as well as

Skirmishes with Nabisco and Pepsico, which owns Walkers crisps as well as the supermarket own-labels, squeezed margins in the KP snacks business, where UK profits slumped 16 per cent to £29.7m.
The 1994 results were further affected by exceptional charges of £49m, including £21m relating to the closure of the Grimsby crisps factory.The crisp sector has become a battle of the walking wounded in recent months, with Bensons crisps announcing the closure of its Welsh factory and Golden Wonder put up for sale by Dalgety. The crisp wars and rising raw material prices bit a chunk out of United Biscuits figures last year, sending profits before exceptional items down 2 per cent to £178m. The merger would have given it access to most US brokerage houses, as well as giving it the credibility to take on big mandates from US institutions.. Duff and Phelps is a Chicago-based manager largely focused on domestic fixed-income business.Govett is highly regarded for its international equity expertise. The companies have accepted that the bitter row with GAEF may not be resolved for a long time.The merger would have propelled Govett into the top 10 of UK fund managers, with a total of $50bn in funds under discretionary management, compared with $9bn at the moment.

The collapse in Govett’s share price threw the mathematics of the merger into disarray.”Despite the termination of the merger agreement, the two companies are continuing to discuss possible ways to combine their businesses,” a joint statement said yesterday. It also alleges managers misrepresented the profits of some of the portfolio companies.In the suit, which names Arthur Trueger, Govett’s executive chairman, GAEF accuses its former managers of negligence and breach of contract.Govett, which has denied all the charges, has instructed its lawyers to counter-sue for very significant damages.Govett had been planning to pay for the merger with the much larger Duff and Phelps by issuing preference shares. The UK fund manager’s share price – at 350p in late January when its big expansion into the US was announced – had dropped as far as 265p.
Govett is being challenged with a $20m lawsuit in the Californian courts by an independent fund it managed, Govett American Endeavour Fund.GAEF, listed in London, alleges that the Govett-owned managers of its fund were secretly taking fees from companies it invested in. Govett, the fund manager, pulled the plug yesterday on its planned merger with Duff and Phelps in the US, after worries over a lawsuit sent Govett’s share price plummeting.

He was also concerned that, despite the lack of a competitor, the Barrow yard still faced months of delay before securing the contract.The MMC last week delayed for a month its report into the takeover bids being mounted for VSEL by GEC and British Aerospace because of the complexity and amount of work involved.. We face some tough negotiations in the coming months before we can be certain the contract has been awarded. Affordability is the key issue.”John Hutton, the Labour MP for Barrow, welcomed the news that the yard which dominates almost every walk of local life looks set to win vital new work.He was not impressed, though, with the repercussions for the MoD’s procurement policy. While that specialisation has served VSEL well – providing steady profits when other shipyards have gone to the wall – it has left the company dangerously exposed.Noel Davies, VSEL’s chief executive, said yesterday: “This could be good news for VSEL and for Barrow but nobody should imagine the placing of the order is a foregone conclusion. Subject to the price being agreed, VSEL will get the order.While the final decision is not expected for months, it cannot come too soon for VSEL, which has shed thousands of jobs in the past few years, mainly at its Barrow-in-Furness home, and is anxious to diversify away from submarines.Only last week, another 600 jobs went, taking the workforce to about 5,000 compared with 14,500 a few years ago.Since the Seventies, the company has concentrated increasingly on submarines, most recently building the Trident vessels. Expected bids from GEC, which owns the Yarrow yard, and Vosper, did not materialise.The MoD has asked VSEL to formally submit a tender on a so-called “napnoc” basis – no agreed price, no offer of a contract.