Fairey set to issue offer for Burnfield

The acrimonious tit-for-tat exchange of statements between specialist engineer Fairey and its pounds 51m bid target, measuring instruments maker Burnfield, continued yesterday. Brian McGowan, Burnfield's chairman, reiterated his call for shareholders to ignore the one-for-four share offer launched by Fairey on Tuesday.

Further action is expected today with sources expecting Fairey to issue its official offer document, which will set the 60-day bid clock ticking.

Mr McGowan said: "This offer is an attempt to force shareholders to agree to an unacceptably low price within a limited time period at the expense of the future benefits that the board expects the recent restructuring and the proposed acquisition of LDS will bring."

Fairey's hostile approach is conditional on Burnfield shareholders voting against their company's proposed acquisition of LDS, a privately owned vibration equipment group, and a proposed rights issue to fund the purchase. Burnfield shareholders are due to vote on the deal and cash call at an extraordinary meeting on 30 December.

Burnfield said: "Shareholders should not be diverted from the attractions of the LDS acquisition nor be misled over its beneficial impact on Burnfield. The board is pleased to have negotiated the acquisition of a high quality business which will have such a strategic impact on the group."

Burnfield said Fairey had made much of the price it proposed to offer, but it claimed the 135p cash-alternative offer represented a premium of only 23 per cent to its price just before the announcement last week of the planned acquisition and rights issue.

Fairey said Burnfield was wrong to use that price as a basis for comparison because it failed to account for the short-term dilution the acquisition would imply to its eps. Fairey said its offer represented a 48 per cent premium to Burnfield's price just before it made its bid.