A French takeover suitor has stepped up pressure on British banknote printer De La Rue by calling for a clearer picture of the production problems which shook the company last year.
Paris-based Oberthur, which revealed last month it had tabled an offer proposal for De La Rue worth £900 million, said the firm needed to provide full details of the issues which arose with a “principal customer”, understood to be the Reserve Bank of India.
Oberthur, which already has 570 staff in the UK, said its indicative offer, which was refused by De La Rue on the grounds that it undervalued the company, still stands and a deal would help restore the firm’s “damaged” reputation.
De La Rue’s share price has plummeted by more than a third in recent months following the production problems that caused its chief executive James Hussey to resign and cost the group £35 million to date. The impact on full-year accounts is still unknown.
Jean-Pierre Savare, president of Oberthur, said: “We believe there are crucial questions that need answering from De La Rue in relation to India and the status of De La Rue’s relationships with its existing customers, in the light of the continuing uncertainty surrounding the company and its future prospects.
“We are extremely serious in making our approach and we believe a combination of De La Rue and Oberthur would provide the catalyst for restoring De La Rue’s standing and reputation, and help De La Rue deliver the high quality production and service that customers demand.”
Oberthur claimed a recent tender for the supply of 16,000 tons of currency paper by the Reserve Bank of India had been awarded to four competitors of De La Rue. The company said: “Oberthur believes that De La Rue should inform the market if it was an unsuccessful participant in such key tender for the Reserve Bank of India or if it was not even invited to participate in that tender.”
It called on De La Rue to provide a full update to its shareholders as to its “realistic prospects of obtaining new business from this very important customer”. Oberthur also said De La Rue should reveal whether or not any major existing and potential customers have declined to invite the company to participate in recent tenders for either paper supply or printing contracts.
De La Rue, the world’s biggest banknote printer, said in its half-year results in November that volumes were set to drop 20% this year following the crisis, which suspended production and a shipment of the affected banknote for two months. De La Rue has claimed the production issues, which are believed to have taken place at a plant in Overton, Hampshire, were caused by some employees deliberately falsifying paper specification test certificates for some banknote customers.
Tim Cobbold took over from Mr Hussey as chief executive on January 1. 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, said in the event of any offer being made and successfully concluded, it would maintain the production of all sterling banknotes in the UK.