Royal Doulton faces Alchemy bid

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The Independent Online

Royal Doulton, the struggling fine china group, is being stalked by Alchemy, the venture capital group which tried to take over the Rover car company last year. However, Alchemy denied reports that it is preparing to make an imminent bid.

Jon Moulton, Alchemy's senior partner, said yesterday: "We have had skirmish level talks with them for 18 months but we have not been inside the company and have conducted no due diligence. One of these days we hope to be talking some serious turkey [with Royal Doulton] but I would imagine we are talking about eight weeks at best." If Alchemy makes a bid for Doulton's it would mark an emotional return to Mr Moulton's roots. He hails from Stoke-on-Trent, the heart of the Potteries, and his family was in the pottery trade.

Royal Doulton is a high profile brand name but the 200-year-old company is loss-making and has been described by its chairman, Hamish Grossart, as being a patient of "intensive care". The shares have fallen sharply and the company now has a stock market value of £35m.

Waterford Wedgwood, the rival crystal and ceramics maker, has a 15 per cent stake in Royal Doulton. It could also be interested in making a bid, although it has always described its stake as a defensive move in case Royal Doulton is taken over.

Royal Doulton has continually disappointed on its path to recovery. It issued a warning in June saying it had been hit by falling sales and tough competition. The business said sales in the first five months of the current financial year were 5 per cent down on the same period last year. It blamed weakening demand in the UK and US in the second quarter. Margins were under pressure, it said. The company added that the slump would, "slow the group's recovery" and that management could see "no reason to plan for strengthening of demand".

Under Mr Grossart, who became chairman in 1998, the company has cut 2,000 jobs and sold its Royal Crown Derby business to its management. Last month, it completed the sale of Caithness Glass to Royal Worcester and Spode for £6m.

Alchemy was tipped as potential bidder for Oasis Stores which is now being sold to a Prudential Portfolio Managers-backed bid.

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