Ibstock shares row

Ibstock was given a "reduce" status by City analyst Kevin Cammack of Merrill Lynch this week. But the view has been ignored by Sir Ron Brierley, the brickmaker's largest shareholder, who is still actively building his stake in the company. Brierley now holds 26 per cent of all Ibstock shares.

Cammack, in a detailed four-page analysis of Ibstock, said: "The surprise departure last November of chief executive officer Ian Maclellan, quickly followed by Anthony Hopkins, the UK brick head of only five weeks standing, left Philip Mengel as not only the newly installed group CEO but also in charge of UK brick, the key division after the Redland Brick acquisition."

Cammack added: "Facing twin challenges of integration and rationalisation, but at the same time as establishing leadership in a recovering market, the management moves looked less than convincing."

However, a source in the City said such criticisms could be flawed because transaction details show that Merrill Lynch was actively involved in buying the Brierley stakeholding.

Cammack said: "We have no vested interest. We have dealt for some of the major shareholders but are acquiescent whether the shares go up or down. We have tried to point out that Mengel has all to prove. The share price, in my view, assumes he will succeed."

As president of Brierley Investment, Brierley first took a five per cent stake in Ibstock back in October 1994, increasing this to 10 per cent by April 1995. The figure reached 20 per cent by the end of that year.

A City analyst said: "Brierley is well-known as a multi-millionaire entrepreneur. He comes in to make a quick profit and likes to shake up a company. Ibstock has done relatively poorly in recent times and has had problems integrating Redland Brick."

If Ibstock shares soar in value over the next few months, as the UK housebuilding market lifts off, Brierley's vision could reward him handsomely.

l Brick industry data for the opening quarter of 1997 show production and sales evenly matched at 700 million bricks. Stocks are unchanged on 1996's year-end total of 1,100 million.

The average brick price rise of three per cent in the last six months has been eroded by fuel cost increases.