Food group says no Kwik Save bid

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The Independent Online
DAIRY FARM, the food group that is part of the Jardine Matheson empire, has 'no present intention' of bidding for Kwik Save, the discount retailer, despite ending its agreement not to increase its stake, writes Heather Connon.

The two signed an agreement restricting Dairy Farm's ability to buy shares in November 1987, shortly after it acquired 25 per cent of Kwik Save through a tender offer. Subsequent purchases have lifted its stake to 29.4 per cent.

Martin Henderson of Dairy Farm said the agreement was established when the two companies did not know each other and there was a need to establish relations. Now both companies share a chairman, Simon Keswick; Kwik Save's chief executive Graeme Bowler was formerly a Dairy Farm executive. His predecessor, Graeme Seabrook, is now chief executive of Dairy Farm and remains on Kwik Save's board as a non-executive director.

The current agreement does not prevent Dairy Farm from bidding for Kwik Save but it forces Dairy Farm directors to resign a month before any bid is launched - alerting the market.

The City was undecided about whether the ending of the agreement made a bid likely. The shares closed down 3p at 604p, having been 3p higher at one stage.