Kalon hoped to gain Manders paint for free

MIKE HENNESSY, the chief executive of Kalon, the paint maker, admitted yesterday that the takeover bid for Manders in 1992 was motivated by the prospect of getting extra paint businesses for nothing, writes Robert Cole.

Manders sold its paint operation last year and a retail property in Wolverhampton last month to concentrate on its ink businesses. Mr Hennessy said yesterday that he had not been tempted to buy the paint part of Manders when it came up for sale. 'It was very expensive,' he said. 'Our bid (in 1992) made sense because we would have come out with the paint part for nothing. In fact we could have sold the inks company and the property and come out with net cash.'

His comments accompanied news that annual pre-tax profits had risen 77 per cent, mainly due to the acquisition of the French paint manufacturer and retailer Novodec.

Kalon paid pounds 20m for Novodec in February 1993. Novodec has contributed pounds 4.8m to operating profit since its acquisition.

Mr Hennessy was confident of further profits this year. Earnings per share were 9.9p for the year to 31 December, 37 per cent ahead of last time. The dividend was raised 31 per cent to 4.2p. Shares fell from 182.5p to 178.5p, but are still trading at double the price immediately after the Manders bid failed.