City: Zeneca away

SO IT'S going to be all right after all. Bar some unexpected cataclysm in the stock market tomorrow morning, the pounds 1.3bn Zeneca rights issue, which has been struggling for weeks, looks like securing a reasonable level of take-up - 80 per cent plus. An embarrassing flop has been averted. The more difficult question to answer is whether demerger of ICI's pharmaceuticals division was the right thing in the first place. Sir Denys Henderson, who is now chairman of both Zeneca and the remaining ICI rump, regrets nothing. True, with the health care and pharmaceuticals sector now deeply unpopular, the demerger seems to have created little if any immediate shareholder value, but that was never the point, he insists.

The idea was to give the managements of the two companies fresh focus and direction in a rapidly changing world chemicals industry. If he's got it right, the added shareholder value will come naturally in the years ahead. Both Sweden's Procordia and Eastman Kodak of the US have recently announced similar demerger proposals. Imitation is the sincerest form of flattery, they say.