Float windfall for Tetley Tea folk

TETLEY, the group that bought us the Tetley Tea folk and round tea bags, yesterday announced plans for a stock market flotation. Tetley, which makes Britain's favourite cuppa and is the second largest tea producer in the world, is expected to be valued at pounds 400m.

The flotation will give a huge windfall to Tetley's board and the 250 managers that together own more than a fifth of the company.

Leon Allen, Tetley's chief executive, and Roger Price, its finance director, will become tea millionaires many times over after this summer's flotation.

The two executives bought their 8 per cent stake in the group for just over pounds 500,000 when they led a management buyout of Tetley from Allied Domecq in 1995 for just under pounds 200m. When the group reaches the market that stake could be worth more than pounds 20m.

The new funds will be used to develop new products, such as expanding production for the group's new drawstring teabag, designed to prevent annoying drips. Tetley will use its new listing to give it the financial firepower to look at tea and coffee acquisitions.

Tetley has become famous for its TV campaign featuring characters such as Sidney and Gaffer supping their favourite brew. The introduction of the round tea bag in 1991 saw the group rise into the number one spot in the UK tea market.