Kalon receives offers for Mander Centre

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KALON, the downmarket paint maker offering pounds 91m for its rival Manders, has received approaches from potential buyers about the Mander Centre, the Wolverhampton shopping complex.

Kalon will sell the shopping centre if it wins the bid battle. The value of the Mander Centre was pounds 57m at 31 December, but had been reduced from pounds 65m the previous year. It is thought to have slipped further, with the property market still moribund, since the end of Manders' last financial year.

The company points to its positive cash position to stress that it is in no hurry to sell the Wolverhampton property. It is eager to avoid being classed as a fire seller, and said it was willing to wait up to three years to find a buyer at an appropriate price.

The hostile takeover bid is about half-way through its 60-day timetable, but Kalon is already entertaining offers. It is thought it would accept anything over pounds 50m for the complex, which is fully let and, according to Manders, has rising rental streams.

Kalon stated in its offer document: 'The retention of the Mander Centre does not fit with Kalon's long-term strategy. Kalon would expect to sell the Mander Centre when market conditions permit.'

Manders has criticised Kalon on the grounds that it has no experience of managing property. It said that to sell the centre would mean accepting a low price.

The main object of Kalon's desire in Manders is its paint operation. Manders also produces printing inks, and Kalon has had approaches from potential buyers for that division, too.

But the inks business is not up for sale, even assuming Kalon is successful in its takeover attempt.

Mike Hennessy, Kalon chief executive, believes ink manufacture and distribution shares business characteristics with paint. The sourcing of raw materials, the manufacture and packaging of product and its distribution were all similar to those of paint.

The terms of the all-share offer have slipped with the falling stock market since the bid was launched in the second week of June.

At the outset the offer valued each Manders share at 281p. Now Manders shareholders are being offered the equivalent of 248p. Yesterday the shares closed down 3p at 240p.

(Photograph omitted)