Brazilian sale for De La Rue

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The Independent Online
DE LA RUE, the banknote printer, has sold its Brazilian security printing subsidiary to the United States Banknote Company for dollars 45m ( pounds 30m). It has also unwound a crossholding with USBC in its holograms business at a net profit of dollars 15m, writes John Murray.

De La Rue was not looking to sell the Brazilian operation. However, it accepted the offer from the American company because of the tightening of the world market for cheque printing.

The hologram arrangements with USBC were made in 1989 to enable De La Rue to develop into the security hologram market. A spokesman said the deal had now served its purpose in giving De La Rue the technology.

But De La Rue will keep an interest in USBC, as part of the payment for the Brazilian disposal is in USBC stock. The rest, dollars 38m, is in cash.

The deals leave De La Rue with more than pounds 200m in cash. However, analysts said they did not think the company would be bounced into a big acquisition. Tim Rothwell, an analyst at BZW, said: 'This looks like it might be a piece of tidying to clear the decks for a takeover.'

Alastair Irvine, at Smith New Court, said: 'I think they are keen to spend the money, but they've got pretty strict criteria for acquisitions so I don't think they're going to suddenly jump off a bridge.'

The shares firmed 4p to 679p.

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