Hamilton drycleaners to the firm's former owners only two months after taking it over.

Now Hamilton Valcleners will be merged with Just Shirts Launderers and Drycleaners, owned by Stephen Thomson, who sold the shop and Paget Drycleaners to Mr. Davis after a bruising battle over union rights.

Mr. Davis -- said some months ago to be $2 million in debt -- declined to say how he funded the purchase of the two shops at the time of his takeover.

But he said a financial plan to sort out his business difficulties was on track.

The two shops were taken over by Mr. Davis at the end of April after they were shut down following a wildcat strike over a union ballot.

Then-owner Mr. Thomson, who took the two businesses over in February, shut the doors after three days of picketing of his businesses in March, which includes Mailboxes Unlimited.

The dispute led to disruption which crippled bus, ferry and garbage services.

And 1,000 BIU members marched on the House of Assembly.

The row was sparked after Mr. Thomson's takeover of the shops, which had been unionised -- all the employees, however, had been laid off before he bought the fixtures and fittings.

He later re-employed the staff, around 20 people, in new companies under the same terms as his other businesses, which included a no-collective bargaining clause.

A statement issued by Mr. Davis yesterday said the deal, which takes effect today, was "due to the company's overall debt burden and its inability to effectively service that debt''.

The statement added: "Mr. Davis has pursued the option of merging with a compatible business in order to continue operations.'' Just Shirts, the statement said, will assume a majority position in the merger and the company will trade under that name. It added that the deal will create five separate locations across the Island to handle drycleaning and laundry.

Mr. Davis said: "The merger comes at a time of increasing competition within the drycleaning industry and the owners are confident that the individual strengths each company had separately will strengthen their performance and together provide future growth.''