Stationery Office chiefs set for pounds 13m windfall

THREE TOP executives at the Stationery Office, led by the former deputy governor of the Bank of England Rupert Pennant-Rea, are set to make a profit of up to pounds 13m following the demerger of the company yesterday in preparation for a trade sale or flotation.

Mr Pennant-Rea, who led the takeover of the business when it was controversially privatised in 1996, owns a 4.5 per cent stake in the company. The shareholding cost him pounds 60,000 and is now worth an estimated pounds 4.5m.

The Stationery Office's chief executive, Bob Thian, stands to make a windfall gain of pounds 5.9m on his 6 per cent stake and the finance director Richard Martin, who owns a 3 per cent stake, is in line for a profit of just under pounds 3m. The venture capital group Electra Fleming owns two-thirds of the company and stands to make the biggest profit of all.

The National Audit Office criticised the privatisation of the Stationery Office for pounds 54m by the Conservative government, saying the sale had undervalued the business. It is now worth an estimated pounds 150m.

The Stationery Office yesterday announced a 45 per cent increase in operating profits to pounds 18.3m and said the demerger into four independent businesses - publishing, office supplies, document management and security printing - had been completed.

Mr Pennant-Rea said: "We told the staff when we bought the business that it had had one owner for 210 years but do not assume it will have the same one for the next 210. Venture capital providers want to realise their investments."

Mr Pennant-Rea will be chairman of all four businesses. Mr Thian, a former chief executive of North West Water, will resign as chief executive with a pay off of pounds 167,500 equivalent to one year's salary. Mr Martin, who is quitting as finance director, will get a pounds 129,000 payoff. Each will remain a non-executive director of one of the demerged businesses.

The new company, to be known as Stationery Office Holdings, publishes 88 million pages of parliamentary and government documents a year and also owns Whitaker's Almanack. Office supplies is expanding from government offices to supplying the private sector and security printing produces most confidential government documents, such as Budget papers and monopolies reports.