Regan trust ends in coffee shop merger

ANDREW REGAN, the entrepreneur who last year failed in a pounds 1.2bn takeover bid for the Co-operative Wholesale Society, yesterday closed the door on the affair with proposals to amalgamate his investment company with City Gourmets, a coffee shop group.

A spokesman for Mr Regan said the deal would allow him "to draw a line under" Lanica, his investment vehicle, which has seen its shares suspended since February last year. "That is the end of Lanica and the shareholders will get some value back," the spokesman said.

Shareholders will be offered 1.093 shares in City Gourmets for every share in Lanica Trust, the investment company controlled by Mr Regan.

Lanica will then be struck off the register of companies at Guernsey and will effectively cease to exist. City Gourmets will then list on the Alternative Investment Market on 15 June.

City Gourmets, which runs the Madisons chain of coffee bars, is effectively buying Lanica as a pounds 1.8m cash shell. Mr Regan will buy back just three small assets for pounds 204,750. These include Galileo, the vehicle used for the Co-op bid.

The deal will value Lanica at just pounds 5m with each share worth approximately pounds 1.

Directors of Lanica will take no active role in the new company, reducing their holdings in Lanica Trust from 65 to 10 per cent. Before City Gourmets goes to market, Mr Regan and two fellow directors of Lanica will resign.

Gareth Lloyd-Jones, chief executive of City Gourmets, said the company planned to list at a value of pounds 20m, using money from the Lanica deal to open a string of new coffee bars.

Last month, the Crown Prosecution Service dropped proceedings against Mr Regan, started by the CWS, because of insufficient evidence. The CPS had been investigating the alleged theft of confidential CWS documents during the aborted takeover bid.

The Serious Fraud Office is still investigating a payment into a Swiss Bank by Hobson, a food company owned by Mr Regan. The payment was made shortly after Hobson had secured a supply contract with the CWS.