De La Rue rejects French bid

6th Dec 2010 07:05

De La Rue has received a bid, the banknote printer confirmed Monday, thought to be from French rival Oberthur Technologies."De La Rue plc notes the recent press speculation and confirms that it has received a highly preliminary and opportunistic approach," according to a very brief statement."There is no certainty that this highly preliminary approach will lead to an offer," it warnedTalk is the all-cash deal valued the UK company, also responsible for printing UK passports, at around £800m, a 25% premium to Friday's price tag of £641m.Rumour has it that following the rejection of its initial approach, privately-owned Oberthur could come back with a bigger offer soon. It's been a nightmare four months for De La Rue. In July, it warned sales would be materially below expectations due to quality and production irregularities at one of its paper production facilities. Revelations that some paper production had failed to meet certain quality specifications was hugely embarrassing and forced the resignation of chief executive James Hussey.In September, it admitted that some of its employees had been deliberately falsifying paper specification test certificates for banknotes. That was forecast to slice at least £35m off pre-tax profits for the first half.Just a few weeks ago it confirmed the hit and warned that demand for banknotes was weak generally over the six months. Revenue slipped from £252m to £209m. It does not expect to recover that shortfall this year.Speculation that De La Rue might fall have been doing the rounds for a few weeks now. Turnaround specialist Melrose has been touted as a possible bidder.