COD Compagnie De Saint-gobain

RNS No 5039q
FALCON HOLDINGS PLC
4th March 1999


PROPOSED DISPOSAL OF THE BUSINESS AND CERTAIN ASSETS OF 
WALKER & STAFF LIMITED ("WALKER & STAFF")

INTRODUCTION

Falcon Holdings Plc ("Falcon") announced on Monday 22 
February 1999 that it was in negotiations with Oliver 
Ashworth Group PLC ("Oliver Ashworth"), a wholly owned 
subsidiary of Compagnie de Saint-Gobain ("Saint 
Gobain"), to dispose of the business and certain assets 
of Walker & Staff (a wholly owned subsidiary of 
Falcon).  It was further announced yesterday that the 
Disposal Agreement had been signed in respect of the 
disposal of the business and certain assets of Walker & 
Staff (which include stock, goodwill and fixed assets 
excluding two motor vehicles)("Disposal") for an 
aggregate consideration of approximately #1.4 million.  
Oliver Ashworth will not assume any debt or current 
liabilities of Walker & Staff.  Following Completion, 
this consideration will be subject to an adjustment, 
which will amount to 110 per cent. of the difference 
between #1.07 million, being the value of the stock as 
at 31 January 1999, and the value of stock held by 
Walker & Staff as at Completion.  There is not expected 
to be a material difference between such amounts and, 
in any event, the difference will be no more than 
#140,000. The maximum consideration payable by Oliver 
Ashworth is therefore #1.54 million.

In view of the size of the transaction, the Disposal is 
conditional upon the approval of the shareholders of 
Falcon.  An extraordinary general meeting has been 
convened for 22 March 1999 to seek approval from 
Shareholders for the Disposal.

INFORMATION ON WALKER & STAFF

Walker & Staff distributes industrial valves and 
pipeline equipment, predominantly in the South East of 
England.  Sectors serviced include the water, 
pharmaceutical, chemical, brewing and dairy industries.
In the year to 31 March 1998, Walker & Staff reported 
turnover of #6.8 million (1997: #6.6 million) and an 
operating profit of #0.28 million (1997: #0.15 million) 
before exceptional relocation costs of #44,000.  As at 
31 March 1998, Walker & Staff had audited net assets of 
#0.49 million, which included an intra group creditor 
of #1.25 million. 

REASONS FOR AND BENEFITS OF THE DISPOSAL 

At the time of announcing the interim results for the 
six months ended 30 September 1998, on 8 December 1998, 
the Chairman indicated that Walker & Staff had suffered 
due to a severe downturn in demand in the market for 
its products.  Although Walker & Staff has returned to 
profitability, the Directors believe the outlook for 
the future remains uncertain and therefore that a 
better return for Shareholders can be achieved by 
investing the proceeds of the Disposal in other 
opportunities.  Shareholders should be aware that any 
future acquisition made by Falcon will be a reverse 
takeover, as defined in The Listing Rules of the London 
Stock Exchange.  Consequently, any such transaction 
would involve a suspension of the listing of the 
Ordinary Shares, the prior approval of the transaction 
by the Companys shareholders at the time and the 
Group, as enlarged by any such acquisition, would be 
treated as a new applicant to the Official List of the 
London Stock Exchange.

The Directors also believe that, in order to secure the 
future of the business and its employees, Walker & 
Staff would benefit from being part of a much larger 
organisation which could take advantage of increased 
buying power and a multi-branch distribution network.

Oliver Ashworth, which was acquired by Saint-Gobain in 
May 1998, has a national distribution network and is 
continuing to grow with the support of Saint-Gobain. 
The Directors believe that Oliver Ashworth is well 
placed to ensure the future of the Walker & Staff 
business and its employees.

USE OF THE DISPOSAL PROCEEDS AND FUTURE PROSPECTS

Walker & Staff is the only trading subsidiary of the 
Company.  Following the Disposal and the realisation of 
debtors and the payment of creditors, the Company will 
have assets in property, gilts, quoted shares and cash.  
The proceeds of the Disposal will be initially invested 
in high interest bearing instruments.  The only 
employees of the Group immediately following the 
Disposal will be the Executive Directors, who will 
continue to manage the affairs of Falcon.  Mr J R L Lee 
and Mrs J C Ratcliff will also remain as non-executive 
Directors of the Company.

It is the intention of the Directors to seek 
appropriate opportunities, specifically the acquisition 
of other businesses in the medium term, for enhancing 
Shareholder value.  As at the date of this document, no 
specific opportunities have been identified.

PRINCIPAL TERMS OF THE DISPOSAL AGREEMENT

Under the terms of the Disposal Agreement, Walker & 
Staff has conditionally agreed to sell its business and 
certain assets to Oliver Ashworth for an aggregate 
consideration of #1.397 million in cash (subject to 
adjustment to reflect the value of stock as at 
Completion).  The Disposal is conditional on the 
approval of Shareholders and on there being no material 
breach by Walker & Staff of warranties contained in the 
Disposal Agreement.  Subject to these conditions being 
satisfied, it is expected that Completion will take 
place with effect from the close of business on 31 
March 1999.

Under the Disposal Agreement, the Company has agreed to 
provide Oliver Ashworth with a guarantee of any 
liabilities of Walker & Staff which may arise pursuant 
to the Disposal Agreement, for example following a 
breach of warranties.  

The Disposal Agreement also provides that, on 
Completion, the Company will grant a subsidiary of 
Oliver Ashworth a five year lease on its property at 
Radford Business Centre, Radford Way, Billericay, Essex 
CM12 0BZ and that such subsidiary will lease back 
office space at such property to the Company.

The Disposal Agreement further provides that on 
Completion, the Company will enter into a consultancy 
agreement to provide the services of the Executive 
Directors, on a part time consultancy basis, to the 
subsidiary of Oliver Ashworth referred to above, for up 
to six months following the Disposal, in consideration 
of the payment of a fee to Falcon.

A document detailing the Disposal will be posted to 
Shareholders tomorrow (5 March 1999). 

For further information contact:

Henry Browne, Chairman or
Colin Pearce, Financial Director
Falcon Holdings Plc
Tel: 01277 720111

Philip Johnson, Managing Director
Henry Cooke Corporate Finance Ltd
0161 832 2288


END

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