Slater returns to the market fray

JIM Slater, legendary 1970s asset- stripper and one-time 'minus millionaire', is making a stock market comeback, helping to turn Aim-listed cash shell Galahad Capital into an acquisition vehicle.

Galahad jumped 1 1/2p to 9p on news that Slater, his son Mark and other backers are investing £1.95m for 49%. In total £2.3m has been raised at 6p, giving Galahad £3.8m cash worth 5p a share.

Mark will be executive chairman, while his father advisee. 'I'm quite experienced with shells,' said Jim Slater. 'I've been involved in about 50. I hear about things that might be helpful.'

He sprang to fame with his Slater Walker merchant bank before it collapsed in the 1974 financial crisis. That left him with £1m net liabilities. He described himself as a 'minus millionaire' and it took him six years to bounce back. Two years ago, he proved as canny as ever when he jumped out of the tech bubble days before it popped.

For some time now Slater has been tipping housebuilding shares, especially Countryside (175 1/2p) and Westbury (289p). He asks why these are just six times likely earnings when retailing shares are twice as expensive. The two sectors, dependent on consumer spending, should perform in tandem.

Galahad will target former internet incubators and other shells trading at a discount to net assets, as well as undervalued operating companies. 'We're looking for cheap assets,' said Mark. 'About 40% of quoted companies trade at a discount.'

An obvious candidate would be dotcom incubator NewMediaSpark. Galahad's new managing director Alistair King joins from Spark, where he was company secretary. Mark sold his incubator, Internet Indirect, to Spark two years ago. Spark shares are just 12 1/2p while net assets are 34p - including 10p cash. Mark Slater, interestingly, had these figures at his fingertips.