The communications and electronics company had refused to give normal briefings to market analysts because of fears it would break new, tougher Stock Exchange guidelines about revealing share-sensitive information.
Companies have been more cautious about talking to analysts and the media since the Stock Exchange ticked off London International Group for telling a select group of brokers that its profit forecasts were too high. Many companies feel the channeling of important information is being hindered by the threat of retribution.
Exchange rules had 'made it very hard' for the company, Ian Scott- Gall, managing director, said. 'Because of the negotiations we have been under constraints not to talk to our house broker about normal trading activity, and that has made the market nervous.
'A lot of companies have made profit warnings recently, and our silence was interpreted as meaning that a disaster was waiting to happen. We have been plagued by innuendo.'
Blick shares have fallen from a 1993 high of 575p, and were down 8p yesterday to 445p because dealers feared a rights issue would accompany the acquisition.
Yesterday Blick, which rents electronic equipment like pagers, clocking-on machines and communal television systems, felt it was so close to clinching a deal that it could prepare the market. Mr Scott-Gall said it would be a 'substantial acquisition', adding: 'The purchase will be the biggest Blick has ever made, and will substantially increase our rental income and broaden customer and product bases.'
The deal is understood to be worth at least pounds 40m, and analysts speculated that Blick was probably talking to Cable and Wireless or Granada about the purchase of rental contracts.
The news was accompanied by profit estimates and a dividend forecast to lay the groundwork for a cash call and to try to stabilise the share price after rumours about profitability and accounting policies.
Blick said pre-tax profits for the year ended 30 September would not be less than pounds 9.3m, an increase of 8 per cent and within analysts' range of between pounds 9.1m and pounds 9.8m. There will be an increased final dividend of 6.9p, making 10.2p (9.2p) for the year. Blick has pounds 6.6m in cash.Reuse content