Rowland rejected mining merger

TINY ROWLAND, the chief executive of Lonrho, turned down the opportunity of a full-scale merger with Gencor, the South African mining giant, which was potentially worth far more than his share sale to Dieter Bock, writes Nick Gilbert.

Details of the abortive Gencor talks are emerging as the deal with Mr Bock comes to fruition. The mysterious German tax lawyer turned property investor is expected to emerge with around 19 per cent of the international trading group in the wake of the expected flop of Lonrho's pounds 169m rights issue. Mr Bock, who underwrote half the issue, could eventually end up with nearly 25 per cent if he takes up an option to buy out Mr Rowland's remaining shares in three years' time.

It is now thought that Mr Rowland's pride obstructed a deal with Gencor which might have been of more benefit to Lonrho shareholders.

According to sources in London and Johannesburg, Mr Rowland discussed a hugely ambitious reverse takeover deal with Derek Keys, then Gencor chairman and now South Africa's finance minister. Lonrho would have merged with the Joburg mining house by offering one of its own shares for every two in Gencor.

Mr Rowland would have ended up with a much smaller but potentially more valuable percentage of a much larger business.

But the plan foundered, partly because Mr Rowland insisted on becoming the boss of the huge new business empire while Mr Keys insisted on retaining control. The South Africans wished to put their own men in charge of the combined African mining interests, leaving Mr Rowland as the 'navigator' running the hotel, sugar plantation and newspaper interests.

Brian Gilbertson, Mr Keys' successor, still hopes to persuade Lonrho to merge the two companies' platinum interests.

(Photograph omitted)