Equifax takeover bid for Infolink rests with OFT: Robert Cole reports on a complicated battle between rival US suitors

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The Independent Online
fate of the fierce takeover battle for the information provider UAPT Infolink rests with the Office of Fair Trading - whose former director-general, Sir Gordon Borrie, is one of UAPT's non-executive directors.

Infolink provides information for credit-risk assessors, but has run into difficulties. In the 12 months to 31 December its pre-tax profits slumped from pounds 1.1m to pounds 446,000.

On 26 July, Equifax, one of its competitors in the UK, bid pounds 5 a share for the group, winning a recommendation for its offer from Sir Gordon and his fellow Infolink directors. A week later Trans Union, a US rival, pitched in with an offer of pounds 5.50 - and persuaded the Infolink board to change allegiance and support its bid.

However, when Equifax hit back on 3 August with an offer of pounds 6 a share - valuing the company at pounds 47m - the Infolink board failed to switch its recommendation back, saying it thought the higher Equifax offer would be referred to the Monopolies and Mergers Commission by the OFT.

Both Equifax and Trans Union are American-owned. But, unlike Trans Union, Equifax has a sizeable UK operation. If the deal is referred it will be on grounds that Equifax and Infolink together would be in a dominant position.

One problem for the OFT as it considers the proposals is that market share statistics are notoriously unreliable in this area. However, the five biggest UK operators are CCN, Dun & Bradstreet, Infolink, Infocheck and Equifax.

A spokeswoman for Trans Union said Infolink and Equifax combined would represent 25 per cent of the market. If so, Infolink's view that the Equifax offer will be referred may prove accurate.

However, Equifax's merchant bank adviser, Barings, insists the Equifax board is convinced the OFT will recognise the merits of its case.

'The possibility of a reference has been dragged up from left field. It is a possibility that we will be blocked, but no more than that,' an Equifax spokesman said.

Equifax also suspects there is another agenda. This time last year, Infolink's three executive directors were subjected to - but survived - a no-confidence vote at a special meeting called by shareholders.

Yesterday the Equifax spokesman said: 'There is a concern on the part of the Infolink board as to whether they will retain their jobs in the event that Equifax is succcessful.'

Trans Union, on the other hand, has no UK base at present and will need Infolink managers.

Whatever the outcome, shareholders will have little room for complaint. Shares were trading at 140p before the bid talk started.

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