Waterford Wedgwood may sell Rosenthal wing

SHARES IN Waterford Wedgwood jumped more than 28 per cent yesterday over news that it may sell its troubled German subsidiary Rosenthal.

In a brief statement Waterford Wedgwood said it had appointed investment banker JPMorgan Cazenove to conduct "a strategic review of the Rosenthal business".

Rosenthal, based in the Franken region of northern Bavaria, is one of Germany's best known porcelain companies and employs more than 1,700 people.

Like its parent company, however, it has struggled in recent years to cut costs to see off low-cost competition from Asia. It has struggled, too, to adapt to modern German tastes, signing co-operation deals with Versace to produce designer lines.

In February, Rosenthal announced plans to cut 400 jobs in its German operations and it is expected to report a loss for the business year ending March 31st, 2008, after profits last year of just €600,000 on turnover of €170 million.

Germany's Financial Times Deutschlandsuggested yesterday that several potential buyers have already emerged, from financial investors to wealthy German families.

Initial estimates suggest that the Irish company can expect the sale of Rosenthal to generate between € 150 million and € 200 million for Waterford Wedgwood.

That would be a welcome windfall for majority shareholders Sir Anthony O'Reilly and brother-in-law Peter Goulandris, who have put more than € 300 million into Waterford Wedgwood in the last five years.