Oberthur offers 905p a share for De La Rue

6th Dec 2010 16:44

Shares in De La Rue enjoyed a second wind Monday afternoon after the company that bid for the banknote printer announced it had offered 905p a share.Shares in De La Rue jumped this morning after it said it had rejected an offer from an unnamed bidder. They then climbed higher after France's Oberthur, which prints euros and other currencies, said it had bid 905p a share for De La Rue. That values the company at about £900mResponding to De La Rue's rejection of the offer, Oberthur said it had studied De La Rue's interim results announcement, which sent the company's shares down 11%.'Oberthur does not believe that this announcement supports De La Rue's assertion that Oberthur's indicative proposal, which represents a premium of 64% to De La Rue's closing share price on 29 November 2010, fails to recognise the fundamental value and future prospects of De La Rue's business,' it said.Meanwhile, De La Rue issued another announcement in response to Oberthur's, after trading closed.'The board of De La Rue having discussed the approach with its advisers, believes the proposal in no way reflects the fundamental value of the company,' De La Rue said. 'Consequently the board was unanimous in rejecting this opportunistic approach.'De La Rue said that strong long-term fundamentals, including its nearly 200-year old brand, steady growth in core markets and a highly-skilled workforce, should not be overlooked despite current problems.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.