Hamilton dry cleaning shop after selling a majority stake to former owner Stephen Thomson just two months after he took it over.

Mr. Thomson sold Hamilton Valcleners, with Paget Dry Cleaners, to Mr. Davis after a bruising battle with the Bermuda Industrial Union over collective bargaining at the two businesses.

But Mr. Davis said: "I am working with the staff and the union and I welcome the union.

"We are trying to make every effort as it relates to the staff to increase their security.'' And he said he would continue as sole owner of the Paget shop, using cash from the sale of the Hamilton business to keep it running. He declined to comment on how much of a stake he had retained in Hamilton Valcleners.

Last night BIU president Derrick Burgess said he had yet to discuss the deal with Mr. Davis.

But it is understood union chiefs are suspicious of the deal and its implications.

Mr. Burgess said: "I don't really know what's happening with these guys. I really have to find out exactly what is happening to those workers before I say anything.'' Mr. Davis, who took over the businesses at the end of April, announced on Friday that he was selling a majority holding to Mr. Thomson's Just Shirts Launderers and Drycleaners because he could not service the debt burden.

The under-pressure businessman -- said some months ago to be $2 million in debt -- admitted he was "disappointed''.

He said: "We had every bit of optimism when we looked at the business that it could come back on its own and be vibrant. The question was how much time it would take.'' And he added that his overall financial plan demanded the sale of the Hamilton shop, which he said was a "weak point'' in his battle to deal with his business difficulties.

Mr. Davis took over the two shops after they were shut down following a wildcat strike over a union ballot.

Mr. Thomson, who bought the two businesses in February, shut the doors after three days of picketing of his business empire, which includes Mailboxes Unlimited.

The dispute led to disruption which crippled bus, ferry and garbage collection services and badly affected Hamilton dock operations.

About 1,000 demonstrators marched in protest to the House of Assembly in a BIU-organised show of strength.

The row was sparked after Mr. Thomson took over the shops -- which had been fully unionised.

Dry cleaners All the employees had been laid off at the time of the buyout and the Thomson deal involved only the shops, their fixtures and fittings.

Tension rose, however, when he re-employed the former staff of about 20 people, under the same terms as his other businesses -- which included a no collective bargaining clause.

Mr. Thomson yesterday declined to comment on the deal, saying all statements should come from Mr. Davis.

But he added: "We will work very much together.''