Kenwood remains in Pifco's sights

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The Independent Online
Sameena Ahmad

Pifco, the Carmen hair-rollers to Russell Hobbs kettle group, said yesterday that it was still considering launching a hostile bid for Kenwood, the larger electrical goods group, after its friendly advances were rebuffed earlier this year.

Michael Webber, chairman of Pifco, said yesterday: "We haven't ruled out anything. We still believe in the industrial logic of merging with Kenwood. We haven't said whether we would go hostile or not."

Pifco reported a 23 per cent rise pre-tax profits to pounds 3.8m for the year to April. Mr Webber said the company, which has pounds 7.5m net cash and no gearing, had "substantial" bank borrowing facilities to fund an acquisition and would consider issuing paper.

He added that Pifco, which has been under pressure to make an acquisition and has been stalking Kenwood for two years, was also considering three other potential targets including a large appliance maker on the Continent.

Mr Webber confirmed analysts' views that Pifco was waiting for the next profit warning from Kenwood before making a move.

"It's all very well to feel exasperated and frustrated, but life is about patience and timing. We are biding our time," said Mr Webber. "You must remember that our original offer was never put to Kenwood's shareholders."

Kenwood's shares have slumped from 400p three years ago to 115p, though renewed bid hopes yesterday sent them 11.5p higher, valuing the company at pounds 53m against Pifco's current market capitalisation of pounds 35m. Pressure from dissident shareholders led to the departure of Tim Beech as Kenwood's chief executive in February.

Pifco's results were themselves upbeat. A strong performance from the group's Russell Hobbs Millennium kettle range, which boils water faster than any other kettle and does not fur up, drove the profits increase.