Oberthur has confirmed it won’t make a bid for De La Rue after the UK manufacturer rejected an improved bid from the French manufacturer.
Oberthur says it approached De La Rue with an increased indicative cash proposal of £9.35 per share on 22 January 2011, representing a 69% premium to De La Rue’s closing share price on 29 November 2010.
According to Oberthur, it also offered to share signed commitment papers from a group of international banks to provide debt financing and a signed term sheet highlighting where funds managed by a leading private equity investor were prepared to make equity investments.
Oberthur says it is ‘disappointed’ that De La Rue’s board has ‘so swiftly rejected this fully financed increased proposal’.
It adds: “Bearing in mind the significant difficulties being encountered by De La Rue and the structural changes occurring in the global banknote paper market, shareholders in De La Rue may now ask themselves how long it will be before the market price of De La Rue shares attains the level of the increased proposal.”
Jean-Pierre Savare, president of Oberthur, said: “Our increased proposal offered compelling and immediate value and was backed by our debt and equity partners. We have repeatedly sought to enter into constructive discussions with the Board of De La Rue over the last four months and we believe our approach could have offered a much needed catalyst to restore De La Rue’s reputation. The Board of De La Rue has not only rejected our approach but has also ignored requests for clarity to be given to the market in relation to fundamental questions about the Company’s customer relationships and financial prospects. As a result, De La Rue shareholders have seen no information to support De La Rue’s assertion that the increased proposal significantly undervalues ‘the strong fundamentals of the company and its long term prospects’.”
Following Oberthur’s announcement, shares in De La Rue fell 15% to close to £6.95.