Allied Colloids results slip-up reveals bid defence facts

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The Independent Online
It was red faces all round yesterday at Allied Colloids, the chemicals group attempting to fend off a pounds 1.1bn hostile bid from US rival Hercules, when it issued the wrong interim results statement to the Stock Exchange.

The original statement gave away facts Allied is likely to raise in its impending defence document. In it Allied predicted that exchange rates and raw material costs were unlikely to rise in the next six months and that overheads had risen slower than sales. Schroders, Allied's brokers, blamed an administrative error.

Hercules called the handling of the results "shambolic" and said it was considering taking up the matter with the Takeover Panel. A spokesman for Allied said: "We are not embarrassed by the facts that have been revealed and stand by them."

David Farrar, Allied's chief executive, claimed that the 52.1 per cent rise in pre-tax profits to pounds 32m for the six months to September would act as "a springboard on which to launch a strong defence".

However Hercules yesterday proclaimed it was "underwhelmed" by the new figures and said they were at the bottom of analysts' expectations. Keith Elliott, chairman and chief executive of Hercules, said: "Sales are down on a like-for-like basis, return on capital continues to decline ... and the company is clearly still vulnerable to currency and raw material price movements."

Philip Morrish, chemicals analyst with Nikko, said the strong results proved the Hercules bid was a non-starter, although Allied was unlikely to remain independent.