Boosey stake sale threatens independence

Boosey & Hawkes's independence was thrown into doubt yesterday after its largest share- holder, the American Carl Fischer music publishing group, said it had put itself up for sale. Under Takeover Panel rules, any single offer for Fischer, which controls 45.3 per cent of Boosey's shares, would trigger a full bid for the British music publisher and instrument maker.

Fischer, which bought into Boosey in 1965 and has seen the value of its investment grow seventeen-fold in the meantime, is understood to have taken the decision to cash in its shareholding following the retirement of Hayden Connor, a family member, as chairman of Boosey. At yesterday's closing share price of 822p, up 30p, Fischer's stake would be worth almost pounds 80m.

Although Fischer has instructed its financial adviser, Credit Suisse First Boston, to try to maximise proceeds by finding a single buyer for the whole company, including the Boosey holding, it is thought equally likely that it will end up placing the shares with a range of institutional investors.

That option, Boosey's preferred outcome, would improve the liquidity of its tightly held shares and maintain its independent stock market listing.

Boosey has been one of the stock market's biggest success stories over the past 10 years, with the value of its shares multiplying eightfold during that period on the back of rapidly growing profits from its instrument- making operations and royalties from its strong catalogue of serious music composers, including Stravinsky, Bartok and Delius. Its sax reeds have been used by such jazz greats as Charlie Parker as well as musicians more renowned for other achievements, such as President Bill Clinton.

As a result of that rapid growth, the company's shares are highly rated, which it is thought might discourage potential buyers for the whole business.

On a forward rating of 24 times earnings, the shares discount much of the company's growth potential and any bidder may be unwilling to pay another premium for control.

Within instrument manufacturers possible bidders include Yamaha of Japan, which although it is the world leader has tended to concentrate on cheaper instruments than Boosey specialises in, and Steinway. The publishing interests might be attractive to a range of buyers, including EMI.

Last month, Boosey announced a 25 per cent jump in pre-tax profits to pounds 7.7m for the year to December.