Bottom Line: More board games

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The Independent Online
IN VIEW of the eye-boggling sums Mattel has forked out for Spear, David Perry, chairman of John Waddington, could do far worse than give his opposite number at Hasbro a call to offer him Waddingtons' Monopoly-based games company instead.

On Mattel's arithmetic, this stalwart but increasingly irrelevant arrow in Waddingtons' quiver could be worth up to pounds 50m.

Who knows? But disposal of the games side and its re-investment in the acquisition of the Dutch Imca would be a lot less dilutive to the company's earnings than the pounds 42m rights issue it is proposing.

The purchase of Imca makes a lot of strategic sense. It significantly broadens Waddingtons' folding cartons product base in dealing with the big multinational food manufacturers, whose custom it shares with Imca, and also improves its buying power over board suppliers.

But it could be a case of too much, too late.

A price equivalent to 10 times' 1993 operating profits looks top-side - as do margins at Imca of 15 per cent.

Waddington meanwhile is still behind in arranging close link-ups with important customers.

A price/earnings ratio of 10 and a yield of 5 per cent look undemanding, but there is better value elsewhere.