GUS looks the winner in Metromail battle

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The Independent Online
GREAT Universal Stores, the home shopping group, appeared to have secured victory yesterday in the $910m (pounds 550m) bid battle for Metromail, the US database business. However, the rival bidder is still threatening legal action.

GUS said yesterday that the board of Metromail had unanimously re-affirmed its recommendation of its cash offer of $34.50.

As the deal has already received clearance from the regulatory authorities, GUS has now launched its tender offer for all the outstanding shares of Metromail.

But ABI has still not given up and has applied for a hearing with the Delaware Supreme Court. This follows the ruling by the Chancery Court which denied the group's request for an injunction to stop the GUS-Metromail deal.

ABI is seeking a hearing on 8 April. Yesterday GUS said: "GUS believes that there is no basis for the Delaware Supreme Court to hear the appeal and will vigorously oppose the application."

ABI's cash and shares offer of $37.50 is higher than GUS's but it was not able to meet a deadline earlier this week under which it was due to supply additional details of its bid to the Metromail board.

With the Metromail bid reaching its final stages, attention will switch once more to GUS's pounds 1.6bn bid for Argos.

The bid is looking more finely balance after Argos announced a new trading strategy last week and the City is expecting a pounds 350m share buy-back or special dividend to be a central plank of the final defence document.

Argos shares are trading at 623.5p, up 2.5p yesterday, compared with GUS's offer of 570p.

"A more spirited defence and more to come has put pressure on GUS to raise its price," said Rowan Morgan, a retail analyst at Nikko Europe.

Argos will not be able to announce its plans for a capital return until the Department of Trade and Industry has ruled on whether the bid should be referred to the Monopolies and Mergers Commission. This decision could come on Thursday.

GUS shares closed 0.5p lower at 741.5p.