Oberthur turns up heat on De La Rue

4th Jan 2011 13:22

Oberthur, the French banknote printer that has bid for De La Rue, cranked up the pressure on its British rival Tuesday saying it believes that De La Rue has missed out on a recent tender to supply currency paper to the Reserve Bank of India.Oberthur last month confirmed it had made a 905p-a-share bid for De La Rue. The bid came on the back of weakness in De La Rue's share price after the resignation of its chief executive in August following production problems that are believed to have affected its biggest client India. De La Rue dismissed Oberthur's approach as 'opportunistic'.Oberthur said today that the takeover proposal had been made in light of the risk that De La Rue's commercial relationship with India had been materially impaired by the paper production problems."Oberthur has reason to believe that the most recent tender for the supply of 16,000 tons of currency paper by the Reserve Bank of India has been awarded to four competitors of De La Rue, and not to De La Rue," it said in a statement today. "Given this and in the light of the above statement by the Company, 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."Oberthur accused De La Rue of a 'lack of clarity' over its commercial relationship with the Reserve Bank of India. It added that it believes De La Rue's reputation has been hit by the events last year, which could make it difficult for it to win new contracts. It said that "despite these significant questions, its indicative proposal to the board of De La Rue stands."Oberthur also underlined that if it is successful in its takeover bid, it will continue to print sterling in Britain rather than overseas - an emotive issue after Cadbury's US owners Kraft went back on a pledge not to close the British chocolate maker's manufacturing facilities here.In a statement issued after the close of trading Tuesday, De La Rue declined to respond the Oberthur's request for details on whether it was an unsuccessful participant in the Indian government's tender, but said it remained pleased with the general level of new orders it has received since July 2010."Outside of the well-publicised paper production issues with a major banknote paper customer, which we first announced in July 2010, De La Rue continues to enjoy encouraging order levels which are at comparable levels to the equivalent period last year," said De La Rue chairman Nicholas Brookes. De La Rue said that it would make a statement to the market once uncertainty over the ultimate outcome of problems arising from paper production issues with one of its main clients is removed. It continues not to name the client.