By Jeff Kimber Chorion is resisting institutional pressure to split into two separately listed co...
By Jeff Kimber
Chorion is resisting institutional pressure to split into two separately listed companies.
Chairman John Conlan says although a demerger is on the cards, he refuses to be rushed into splitting the intellectual property (IP) and bars and nightclubs company.
"We moved in here about three years ago to pick up the mess left from the Trocadero demerger from Burford. It was demerged without a proper management, without a proper plan. We could demerge tomorrow morning but where does it go from there? We've made a lot of progress, but it's not quite ready yet.
"Splitting the businesses has always been towards the top of our agenda but there are various milestones we have to pass before we can do that.
Conlan said the Bar Nightclub business, which includes the Tiger Tiger chain, has the critical mass, growth momentum and operational management, with corporate management coming in place.
The IP side, made up mainly of the rights to Enid Blyton and Agatha Christie, has just got the operational management and the corporate management is beginning to come into place, with the size almost there.
Ideally both companies would have £100m plus market caps, he said. Chorion is currently worth £186m.
"There are a lot of people out there who just want a transaction at the moment but the guys who sit around the board table here have nearly 15% of this business and have more to gain from a demerger than anybody else because a lot of their options will crystallise.
"Even though that's quite attractive, what we're saying is 'hang on, just a bit further down the line here, there's a bit more to be had'."
With £16m in cash there is no need to raise money as part of the demerger, Conlan said. Chorion is looking to acquire more IP rights similar to the Agatha Christie acquisition while expanding the Bar Nightclub division, particularly in London, through acquisition.
Chorion is expanding both sides of its business rapidly, with the IP side especially exciting the City. With the demerger still on the cards likely to create value, buy.
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