I said I wouldn't be putting any fresh news up on this site until Wednesday to keep the Sturmey story at the top of the list but here's a new bit. It's an emailed reply from Gary Matthews of Derby Cycle Corporation. He says the BikeBiz coverage is a "fair recounting of the situation"...

Gary Matthews replies…

[Uploaded to BikeBiz.co.uk on 26th September]


I have read your articles from the website. If you would like, a few

corrections (at least as I see them):

1. The Sturmey sale was handled by Derby Cycle Corp. which is the US based

corporate center. Derby USA is the US operating company…they were as

uninvolved in the sale as Raleigh UK (the UK operating company).

2. There was no US trip made by Lenark executives to discuss or ink this

deal. [Ed. I stand corrected. When Gary Matthews told the Lenark directors had visited him I took that to mean they had flown out to the States when in fact they visited Matthews on one of his trips to the UK.]

3. I was at every negotiating session—the Lenark team only wore business

suits. They never appeared in casual attire. Never wore gold chains or

floral shirts.

4. The quote from the Mail that due diligence took 6 months is incorrect.

The sale of Sturmey with the various bidders took six months.

5. Alot seems to be made on the GBP 30 price, without recognition of the

cost to move the facility and other working capital expenses.

6. On our discussion that you noted, the DCC sale to Thayer had an

enterprise value of approx. $300m, however, the question you asked me was

did Thayer put in $300m? The equity put into this deal was approx. $100m.

You then characterize the bank debt as junk bonds, which is untrue. The

bank debt from the banking syndicate is a typical revolving loan, secured by

our assets. DCC did issue bonds in both the US and German markets which are

selling at a deep discount today. The combination of the two types of debt

basically round out our capitalization. All of this information is publicly


Otherwise, it seems like a fair recounting of the situation, with much to

unfold in the coming weeks. And, while we have great empathy for the

Sturmey Archer employees, and hope that a buyer can be found to keep the

business alive, all the pensions for the employees will be administered via

our program. The Lenark insolvency will not affect one penny of their


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