Canadians investigate DKB stake in Blue Circle stake

Canadian regulators said yesterday that they were studying the legality of a purchase of shares in Blue Circle Industries by Dresdner Kleinwort Benson, the advisers to Lafarge in its bitterly contested £3.65bn bid for British group.

Robert Lancop, the assistant deputy commissioner in Canada's Competition Bureau, confirmed he was looking at DKB's purchase of a 9.6 per cent stake in BCI last week. This came straight after Lafarge took a 20 per cent holding in BCI.

Under Canadian rules, a bidder is not allowed to buy more than 20 per cent of its target ahead of regulatory clearance.

Mr Lancop said: "In this case it was a third party that bought the extra shares. They did notify us that they were going to do this. We need to look at what arrangements that third party has with Lafarge.

"This is potentially a significant issue. If they have infringed our rules, we would have to consider what action we might take. However, our primary concern is the merger itself."

He added that he expects to deal with the bid within the Bureau's normal timeframe. BCI has suggested that Canadian competition concerns, and the DKB stake, could delay a Canadian decision on the deal for months. Mr Lancop said: "This is a very complex transaction. We would expect to deal with it in five months, from start to finish."

A spokesman for Lafarge said it approached Canadian regulators when the bid was launched in January. "This will be resolved by 24 May, when our bid completes," he said.

Separately, reports from Denmark suggested that FLS Industries, BCI's joint venture partner in the country's Aalborg Portland Cement, had offered to buy out BCI for £80m. BCI refused to comment on the reports. The company paid £95.4m for the 50 per cent holding in Aalborg in 1990. Analysts had valued the stake as high as £170m.

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