Lloyds said it had passed heads of agreement for the disposal of certain wholesale businesses to Gehe of Germany and Unichem, the rival chemists chains whose bids of over pounds 600m for the group lapsed earlier this year after the intervention of the Monopolies and Mergers Commission.
The announcement prompted a 7.5p rise in the share price to 498.5p as the market interpreted the news as bringing forward the prospect of the two sides reopening hostilities. The latest move was also seen as an attempt by Lloyds to end the uncertainty over the future of the group and counter hints that any new offers would be pitched at a lower level than before. The previous bids were valued at 490p-500p a share when they lapsed in March.
One source close to the company said yesterday: "Quite clearly there have been attempts by both UniChem and Gehe to talk the bid price down and yet here are two bidders who are quite interested in coming back to bid for this organisation, despite what they are saying. I think the market is recognising that now."
The sale agreements, which follow "numerous offers" from prospective purchasers, are conditional on the successful takeover of Lloyds by either of the potential bidders. They have been reached well ahead of the original deadline of 18 October laid down by the Department of Trade and Industry when announcing the conditions on which the bids could proceed last month. UniChem was told it must divest wholesaling operations in Cambridge, Carlisle, Coulsdon, Derby, Glasgow and York, with Gehe also being forced to sell an extra unit, in Belfast.
The terms of the deals will be passed to the Office of Fair Trading and the Trade and Industry Department for their approval. The DTI will decide only after receiving the recommendation of the OFT. Neither department could yesterday give any clear indication of how long that process would take. However, a spokesman for the DTI said that, while there was no statutory timetable, "once the submission is received from the Director General of Fair Trading, we would aim to make an announcement as soon as possible".
Some observers suggested a new bid could emerge soon. One analyst said: "We are being lined up for a renewal of bidding, maybe as early as this week."