De La Rue rejects Oberthur offer


De La Rue has rejected an improved takeover approach from Oberthur

Banknote printer De La Rue has confirmed a new proposal from its French takeover suitor but said the £926 million approach still undervalued it.

Paris-based Oberthur, which increased its indicative offer from 905p to 935p a share over the weekend, is understood to have joined forces with US buyout firm Bain Capital for the proposal.

But De La Rue, which has been plagued by the fall-out from production problems earlier this year, unanimously rejected the proposal.

The Takeover Panel has given Oberthur a “put up or shut up” deadline of February 7.

Despite the takeover interest, De La Rue’s shares are still down by around 10% since the production problems that caused its chief executive James Hussey to resign and which have cost the group £35 million to date.

Oberthur, a 170-year-old company, has increased pressure on De La Rue since its first indicative offer, calling for a clearer picture of the production problems and full details of the issues which arose with a “principal customer”, understood to be the Reserve Bank of India.

De La Rue, which prints notes for the Bank of England and 150 other countries, said in its half-year results in November that volumes were set to drop 20% this year following the crisis, which caused it to suspend production and a shipment of the affected banknote for two months. The impact on full-year accounts is still unknown.

Tim Cobbold, who joined as chief executive at De La Rue at the start of the year, said: “My first few weeks at De La Rue have confirmed my view that De La Rue is a high quality business with substantial potential in growing markets.

“There are, of course, opportunities for improvement, building on changes already made, but shareholders should be in no doubt of my absolute commitment to realise De La Rue’s full potential and deliver significant value.”

De La Rue not only prints banknotes, but also supplies security documents such as passports, authentication labels and fiscal stamps, and provides cash and sorting equipment to central banks. Oberthur, which also produces debit and credit card technology as well as banknotes, previously said in the event of any offer being made and successfully concluded, it would maintain the production of all sterling banknotes in the UK.

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