3i chief looks for support from Electra shareholders
Monday 22 March 1999
The bid was formally launched on Friday, eliciting an immediate rebuff from Electra's chairman, Michael Stoddart, who called the offer "inadequate". Mr Larcombe will be joined by 3i's finance director, Michael Queen.
Mr Larcombe, who will also be visiting some of 3i's own shareholders this week, believes that, with no white knight having so far emerged, the offer of 65 new 3i shares and pounds 320.70 in cash for 100 Electra shares represents the best deal on the table.
Electra is pressing ahead with its own tender offer for 40 per cent of the trust's stock at 786p a share. Electra is also pledged to wind- up the trust within five years.
Electra maintains it is still open to counter-offers, although as of yesterday no one had yet emerged, despite some energetic lobbying by Mr Stoddart in New York last week.
Mr Stoddart is believed to have seen a number of hedge fund investors, including George Soros. Goldman Sachs, the American investment bank, is also believed to have been in touch.
However, City sources say that financial buyers have had difficulty justifying paying the kind of price Mr Stoddart was seeking to bring back to the board. The attractiveness of the situation to hedge fund investors is also limited by the fact that most of them have their own leveraged funds.
Nevertheless, analysts say that by declaring its offer final, subject to a counter-bid by a third party, 3i may have laid itself open in the event of another party coming in and buying a stake in Electra but not making a full bid.
Electra's largest shareholders include the Prudential, Equitable Life, Standard Life and Legal & General. In addition US-based arbitrageurs are believed to have been active over the past weeks and may account for up to 16 per cent of the stock.
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