UK money printer De La Rue confirms takeover bid
AP - 2 hrs 36 mins ago
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LONDON (AP) — British money printer De La Rue PLC said Monday it has received a "highly preliminary and opportunistic" takeover approach, causing its shares to jump higher.
De La Rue's announcement on Monday did not name the prospective bidder, but published reports have identified it as the French company Oberthur Technologies Group. The Financial Times said the approach valued De La Rue at more than 750 million pounds ($1.2 billion).
De La Rue shares shot up 29 percent to 834 pence in early trading on the London Stock Exchange. "There is no certainty that this highly preliminary approach will lead to an offer," De La Rue said in an announcement to the London Stock Exchange.
Analysts at Panmure Gordon said the offer reported in the media "represents a fair level given our ongoing concerns regarding reputational damage."
Shares in De La Rue, which prints money for more than 150 countries, have fallen by about a third since July, when it disclosed problems with paper production.
"It was found that some of the many detailed specification parameters on the supply of some paper had fallen marginally short of specification," the company had said in a Nov. 23 trading update.
"It was also established that some of the group's employees had deliberately falsified certain paper specification test certificates."
However, the company says the security features of the paper had not been compromised.
In the November update, De La Rue said operating profit in the six months to Sept. 25 had fallen by more than half compared to a year earlier to 23.8 million pounds, and revenue was down 17 percent.
"We have suspected for some time that any interest in De La Rue would only come from a competitor given the problems any private equity firm would face in due diligence given the nature of the business," said Panmure Gordon analysts Mike Allen and Paul Jones.
"Despite the market position and scarcity of the asset we believe it unlikely this will become a bidding war," the added.
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