Great Southern starts talking to bidders: Field family enters discussions after collapse of institutional support

THE BATTLE for the funeral operator Great Southern took a decisive turn over the weekend with the controlling Field family opening discussions with both the existing bidder SCI and Loewen, the Canadian group which entered the fray late on Friday.

It is understood that the collapse of institutional support forced the family, which controls 56 per cent of Great Southern's shares, to open the door to SCI and to ask Loewen to consider bidding as a white knight.

Now that the bidders know for the first time that the Fields are prepared to sell and the price they are looking for, ownership of Great Southern is almost certain to cross the Atlantic.

Before SCI's unexpected success in picking up almost 30 per cent of Great Southern's fully diluted shares, the Fields had refused to discuss the Texan group's offer, which last week was raised from 600p to 680p a share.

The intervention of Loewen, the second-largest north American funeral group with 600 homes, will allow SCI, the market leader, to raise its offer. Analysts believe Great Southern could finally fall for up to 750p a share, compared with the 475p at which shares traded before the bid.

Last week the Takeover Panel froze the bid at day 43 of the allowed 60-day timetable. If, as expected, Loewen tables a higher bid than SCI's pounds 99.1m offer, the clock will start again.

A higher bid from Loewen is unlikely to be the end. SCI is confident it can outgun the Canadians because the stake it already holds would prevent Loewen consolidating Great Southern in its accounts for tax purposes, making it a more expensive acquisition.

The start of a bidding auction means shareholders who have not yet accepted SCI's offer should benefit from the recent upsurge of interest from US groups in the British market.

Scrabble-maker J W Spear eventually fell to Mattel at pounds 11.50 a share after its American rival Hasbro opened the bidding at pounds 9. The shares had been trading at 740p before the first offer.