Battle opens for bus maker Dennis

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The Independent Online
DENNIS, Britain's largest bus builder, was at the centre of a fierce bid battle yesterday after it emerged that Mayflower, the car parts maker, had trumped an offer from rival Henlys.

Mayflower confirmed that it was in talks with the Dennis board over a pounds 255m cash offer for the company. The 450p-a-share bid is at a 15 per cent premium on Dennis's closing price on Thursday, and compares with an offer worth pounds 190.2m in shares earlier this week by Henlys, the country's second-largest bus maker.

Analysts said that unless Henlys raised its offer it was certain to lose the battle for Coventry-based Dennis. They said Mayflower's move put pressure on Henlys to come back with a counter-offer as early as next week, or drop out of the battle.

The Dennis board said it noted Mayflower's "unsolicited interest in making an offer". The statement added that the Dennis directors were "considering this approach" and advised shareholders to "take no action" in the meantime.

Henlys refused to comment, but sources close to the company said that the pounds 525m merger between the two bus makers had received a favourable reception from institutions. They added that Dennis and Henlys also shared a number of institutional shareholders.

The prospect of a Mayflower bid sent Dennis shares soaring by 16 per cent to close at 456p, above the car parts maker's offer price. Henlys shares tumbled 61p to 529p: Mayflower shares lost 2p to 195p.

Sources close to Mayflower said the acquisition of Dennis would bolster Mayflower's double-decker bus division, Walter Alexander. The unit, bought in 1995 for pounds 26m, had operating profits of pounds 7.1m last year on sales of pounds 84.5m.

Last year Mayflower launched a bid for engineering group Vickers, twice its size, in an attempt to win control of Rolls-Royce. The attempt was abandoned after the German car maker BMW threatened to cut off engine supplies to RR if Mayflower won.