Elementis boardroom split

19 August 2001

Elementis is believed to be looking at possible acquisitions in chromium and rheology. At the same time, management is split over whether to sell the leather and pigments division, which is seen by analysts as too small in a fast consolidating segment of the market. Analysts have downgraded their profit forecasts for Elementis in recent weeks. The company, due to report their interim results on August 1, are facing high energy costs in their chromium business and falling demand in their coatings unit. Chief executive Lyndon Cole is leaving after a boardroom split over his management style. Cole is credited with slimming down the group, formerly known as Harrisons and Crosfield. He transformed them into a leaner operation focused on high margin speciality chemicals with leading positions in clays and chromium. In December last year shares rose sharply when the company received a bid approach from a private equity group but slumped in April when the company said any offer would be less than 100p/share. In May, Elementis broke off talks after failing to obtain an acceptable offer. Jonathan Fry, chairman, who will take an executive role until Cole is replaced, said the decision to part ways was not related to the failed sale, although it had been a distraction at a difficult time in the chemicals sector.

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