Importance Score: 65 / 100 🔴
Takeover Battle Erupts for Banknote Printer De La Rue
A fierce takeover battle has broken out for banknote printer De La Rue, as a prominent City financier attempts to disrupt a proposed acquisition by a US private equity firm. The 211-year-old company, renowned for its currency printing, is at the center of a bidding war, attracting significant market attention.
Atlas Holdings’ Initial Offer
De La Rue had previously endorsed a bid from buyout company Atlas Holdings, proposing 130p per share, valuing the firm at £263 million. This initial offer appeared to be a decisive move, signaling a potential change in ownership for the historic British institution.
Edi Truell’s Counter-Proposal
However, Edi Truell, a pensions and private equity magnate, has emerged as a rival bidder. Truell has publicly expressed his willingness to offer 132.17p per share for De La Rue. This counter-proposal follows an earlier, unsuccessful attempt in January, where Truell tabled a 125p per share bid, indicating his persistent interest in acquiring the banknote manufacturer.
De La Rue’s Stance
Despite Truell’s renewed interest, De La Rue has stated its commitment to the offer from Atlas Holdings. A company spokesperson conveyed that they are currently backing the bid from Atlas, while also acknowledging the uncertainty surrounding Truell’s intentions. “There can be no certainty that any firm offer will be made” by Truell, 62, and his associated entities, Disruptive Capital and Pension Super Fund Capital, the spokesperson added.
Share Price Surge
News of the unfolding takeover tussle has ignited investor interest, causing De La Rue shares to soar. Shares experienced a significant jump of 14.7 percent, reaching a three-year peak of 128.5p. Despite this surge, the current share price remains considerably lower than the 905p per share offered by French competitor Oberthur in 2010.
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Historical Context of Takeover Interest
The previous approach from Oberthur, which placed De La Rue’s value at £900 million, was successfully resisted by the company’s management at the time. This historical context underscores the long-standing recognition of De La Rue’s intrinsic value and strategic importance in the banknote printing industry.
Analyst Perspective
Steve Clayton, a leading figure as head of equity funds at Hargreaves Lansdown, offered insights into investor sentiment. He suggested that investors who witnessed De La Rue’s share value plummet to as low as 30p two years prior are likely to feel “relieved” by the recent recovery. However, Clayton also pointed out the historical perspective, noting, “But those with longer memories are more likely to recall that De La Rue’s directors rebuffed an approach valued at over 900p per share. Whoops,” highlighting the missed opportunity from the past.
De La Rue’s Background and Challenges
De La Rue holds a prominent position in the global financial infrastructure, printing banknotes for over half of the world’s central banks, including the prestigious Bank of England. However, the company faced a significant setback in 2018 when it lost the contract to produce the UK’s post-Brexit passports. Historically, De La Rue’s diverse portfolio has included printing newspapers, playing cards, and greetings cards. The company’s listing on the London Stock Exchange dates back to 1947, marking a long and varied history in the printing and security sectors.