Clough tipped to call trading halt on major reshuffle ELICIA...

Clough tipped to call trading halt on major reshuffle

ELICIA KENNEDY

Rumours of a major corporate deal last night enveloped Clough Ltd which is expected to today seek a trading halt ahead of an announcement possibly related to a merger or the Clough family's controlling shareholding.

The engineering group last night refused to comment and family patriarch Harold Clough could not be contacted.

However, independent analyst Peter Strachan speculated in his newsletter yesterday Clough Ltd was poised to unveil a major corporate move "which will almost certainly involve the Clough family equity and may also involve a merger with a significant, possibly European engineering services organisation".

The company yesterday unexpectedly postponed its full year results until today, fuelling the speculation.

Harold Clough last month last month took the company and investors by surprise by flagging the possible sale of his family's $127 million majority stake in the business, founded by his father in 1919.

The 77-year-old said his family, including his six children, lacked a passion for the company and would rather have "a packet of cash".

But Mr Clough said his family would only sell its 53 per cent holding in the company at the right price.

Clough Ltd's share price has risen 17 per cent since he made the commends in July, touching a six month high on Monday before closing square yesterday at 56¢. An unusually high 4.5 million shares were traded on Tuesday.

Mr Clough said last month that the family would be likely to sell a majority interest but keep a small interest in the group, adding that offers had been made.

Market analysts said yesterday that the family could undertake a share swap and transfer the stake to an international services company, giving Clough Ltd greater clout offshore.

The market was more likely to embrace a entire sell-down of the stake, rather than a piecemeal sell off, they said.

After a disappointing $9.5 million loss last financial year despite record $1 billion turnover, Clough Ltd is expected to deliver a full year profit of $15 million.

Since the fiscal 2003 loss, which was precipitated by a record low in its share price at 41.5¢, Clough Ltd's order book has been beefed up and has recently pulled in a string of contracts.

Also, it has cleaned out its upper ranks and hired its first external chief executive, bringing over David Singleton from Britain.

Clough Ltd has jumped on the oil and gas band wagon with the booming oil price spurring a flood of activity in the sector.

The company has mark down a potential $39 million in oil and gas contracts including decommissioning of Nexen Petroleum's Buffalo Field in the Timor Sea as well as contracts on the North West Shelf and North Sea. Its property division has also been working hard, with a $220 million property development in Melbourne as part of a joint venture with Sydney-based Elderslie Property Investmnets.

The venture will see the group develop 1500 residential lots and 30,000sqm of commerical land over the next eight years. Clough is expected to soon auction the first stage of its Salentina Ridge estate, in Beaconsfield.

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Cheers,

Fig Jam