While Ferranti International Signal Plc is in talks with larger companies home and overseas with a view to one of them taking a substantial stake or acquiring the company outright, merchant bank Hill Samuel and fund manager Murray Johnstone are floating a plan to create a new company combining the UK defence business of Ferranti with those of Thorn EMI Plc and Racal Electronics Plc, both of which have been seeking buyers for their defence operations but found little interest. Ferranti is hopeful that trading in its shares can restart shortly. Preliminary results of the Coopers & Lybrand investigation of the the company’s suspect contracts are expected to be published next Monday. The total amount involved is thought to be as much as UKP200m, which would fall to about UKP150m after tax relief. Ferranti has retained Morgan Stanley & Co to try to find a buyer for the Marquardt US weapons business that came with ISC.
