Non-execs press for Guinness demerger

Non-executive directors at Guinness, the spirits and brewing giant, are stepping up pressure for a demerger to unlock shareholder value from the group's otherwise lacklustre performance. Last week's pounds 460m share buy- back, the day after disappointing 1995 results, is regarded by some non- execs as little more than a holding operating pending a more radical move.

Attention has focused on Bernard Arnault, chairman and chief executive of LVMH, the French luxury goods and drinks business, and Guinness's principal shareholder with 21 per cent, as the prime instigator of demerger pressure.

But sources close to the French businessman said that, far from conducting a lone campaign, there was support among other non-executives in what appears to be the beginnings of a boardroom split.

The board has conceded that the demerger option has been formally discussed, and that it was not quashed. It is common knowledge in the City that merchant banks are touting demerger proposals to a number of groups considered prime targets, among which Guinness is high on the list.

Having hit a peak of 635p in 1992, Guinness shares have substantially underperformed the FT-SE 100 index. They ended last week at 466p.

Mr Arnault, whose stake is currently worth about pounds 2bn, is believed to have emphasised that he is a long-term holder of the shares, but that he wants to see greater value.

Anthony Greener, Guinness's chairman, is known to be opposed to the demerger idea, underscoring the value of the core business and focus, and the synergies to be enjoyed between the beer and spirits divisions.