Melrose to launch £650m Novar offer

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Melrose, the specialist bid vehicle, is expected to table a formal £650m hostile takeover bid this morning for Novar, the mini conglomerate formerly known as Caradon.

Melrose, the specialist bid vehicle, is expected to table a formal £650m hostile takeover bid this morning for Novar, the mini conglomerate formerly known as Caradon.

Melrose, led by the former Hanson executive Chris Miller, has been stalking the company for some time and was forced to issue a statement last week confirming its interest. However, a bid in the expected range of 140p to 150p is likely to be immediately rejected by the Novar board, chaired by Sir Graham Hearne.

A bid will pave the way for another bitter takeover battle along the lines of Philip Green's attempt to wrest control of Marks & Spencer during the summer and the drawn-out battle for Abbey National.

Novar issued a statement yesterday saying that it had received proposals from other companies interested in buying parts of the group that would allow it to release value to shareholders. It warned Novar shareholders that accepting the Melrose proposal as outlined last week would involve swapping their Novar shares for Melrose shares and handing a proportion of any upside in Novar's value to the Melrose management.

"Novar has received proposals from other third parties. Melrose's announcement has proved to be a catalyst for a number of parties to express interest in the group's businesses," the company stated.

Melrose dismissed the Novar statement as coming "too early in the proceedings".

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