Filofax attracts pounds 48m hostile bid from US rival
Friday 25 September 1998
Day Runner, a producer of lower-priced organisers based in California, is making a cash offer of 200p per share for Filofax, valuing the business at pounds 47.9m. Filofax shares soared 45 per cent to close just above the offer price at 202.5p, reflecting the possibility of a counter bid. Filofax advised shareholders to "take no action".
Day Runner launched its bid with an attack on Filofax's record. It said Filofax had been ex-growth since 1996, its diversification strategy had failed and its strategic review had not delivered results.
Day Runner's chief executive, Mark Vidovitch, said he was "astounded" that Filofax had not called his company when it was seeking strategic partners last year. Asked why he had not called Filofax himself, he said he did not consider that the right process. "They threw a party but we were not invited."
Day Runner did not attempt an agreed deal with the Filofax board. Instead Mr Vidovitch contacted Filofax's chief executive, Robin Field, only yesterday morning. "We felt we needed to go straight to the shareholders." On Filofax's current position, Mr Vidovitch said: "In the 1980s the brand had a reputation and a recognition to be envied, but today is a different story." However, he pledged to retain the Filofax name if the bid succeeds.
Day Runner says it is the leading personal organiser company in America, with operating profits of $25.6m (pounds 15m) on sales of $167.8m last year and a market value on Nasdaq of $215m. It sells a cheaper range of organisers than Filofax, with prices ranging from $4 to $150.
While Filofax distributes its products though high-street stores such as WH Smith and Boots and is strong in the UK and Europe, Day Runner sells mainly through discount stores such as Wal-Mart, K-Mart and Office World and has most of its business in the US and Canada. Mr Vidovitch said the two businesses were extremely complementary and would make a good fit.
Filofax recorded profits of pounds 4.3m on sales of pounds 42m last year. Although the company boomed in the 1980s, it has found the trading environment much more difficult since then.
Filofax shares crashed in 1996 when the group issued a profits warning. Its market has been invaded by electronic organisers, although Day Runner say these remain niche products because of higher prices.
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