Bid talks fatten APV share price

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The Independent Online
APV, which makes equipment for the food and drink processing industry, and is headed by Neil French, said yesterday it had received a takeover approach. It declined to name the potential suitor, but analysts in the City immediately came up with three possible bidders - Siebe, which launched an unsuccessful bid in 1986, GEA of Germany, and Tetra Laval, the Swedish- based firm best known for its milk cartons.

The announcement came just as the stock market was about to close, and APV's rose 5.5p immediately to 71.5p which values the company at pounds 213m. The gain maintained a five-day rise from 61p last week.

The group has had a troubled history, since it made a well-publicised and expensive attempt to revamp the company logo back in the Eighties followed by a rapid series of acquisitions. A plunge into an pounds 18.2m loss in 1994 cost Clive Strowger his job as chief executive.

The new management embarked on a programme of disposals and rationalisations. APV bounced back with a profit of pounds 26.9m in 1995 only to be hit by a fresh round of problems from competition.

Recently the group has suffered from the effects of the strong pound which has reduced turnover and deflated profits from overseas operations in Denmark, France, Germany and Australia, and strengthened the company's reputation as an eternal under-performer.

Last month APV reported a 44 per cent fall in profits for 1996 to pounds 15m with more heavy rationalisation costs. But Michael Blogg, an analyst at Charterhouse Tilney, believes the continuing adverse effects of the strong pound are already discounted in the share price, and the company could be back onto a cyclical upturn.

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