De La Rue pulls out of Portals bid talks

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The Independent Online
DE LA RUE, the security printer, has abandoned its attempt to agree a takeover offer with Portals, the company that makes paper for banknotes and teabags.

De La Rue said it had 'no present intention of making an offer . . . without the recommendation of the Portals board'. As hopes of a bid disappeared Portals' shares fell from 765p to 653p. De La Rue closed 14p higher at 843p.

Portals is a big supplier to De La Rue, and the two companies have what they described as an exceptionally close commercial relationship. They intend to collaborate for mutual benefit when suitable opportunities arise.

De La Rue will have to pursue its acquisitive ambitions elsewhere. Les Cullen, finance director, said the security printer was in discussions with a number of other companies.

Mr Cullen said price was only one of a range of issues on which the talks faltered. He added: 'We saw opportunities for the two businesses together to work in the world banknote market and perhaps create additional opportunities. We could not agree on that.'

The takeover talks had driven Portals' shares as high as 805p against only 458p in May last year. It has been suggested that De La Rue would have had to offer close to pounds 10 a share to win Portals' recommendation. That looked expensive against the background of a stock market that has fallen 15 per cent since February.

Lars McBride, Portals' finance director, said the discussions with De La Rue had been very friendly and their relationship remained strong. 'We are flattered by their approach,' he said.

Mr Cullen said the two 'mature' boards were not distracted by reports of Laverstoke House, the large Hampshire estate owned by Portals which is the home of its chairman, Julian Sheffield. The arrangement is not disclosed in Portals' annual report.

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