Sara Lee lifts bid to win Courtaulds

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The Independent Online

Courtaulds Textiles, one of the famous names of British industry and the maker of Gossard bras, yesterday yielded to a revised £150.5m cash offer from Sara Lee, the US cakes-to-Wonderbra group.

It is thought that although theboard felt Courtaulds had an independent future and was worth more, the decision was forced by institutions which have seen the value of holdings collapse.

Colin Dyer, the chief executive, said: "We listened to our shareholders. You always think that your business is worth more, but given the valuation the market was giving us before the bid, this is a good outcome."

The sales announced by Courtaulds as part of its defence - of its George Hech womenswear brand and Lyle & Scott golf wear - will be put on hold.

Sara Leeincreased its offer from 100p a share in its initial approach last month to the 145p agreed on Thursday night - a premium of 132 per cent to Courtaulds' 62.5p pre-bid share price.

The US company will also assume a net £110m of debt.

Joan D'Olier, an analyst at Deutsche Bank, said that as part of the giant Sara Lee group, Courtaulds would have a much stronger bargaining position when dealing with the retailer Marks & Spencer, which buys ranges from Courtaulds.Courtaulds depended on M&S for 40 per cent of its turnover.

Advisers to Sara Lee said the new offer was justified by lower-than-expected debt revealed by Courtaulds in its defence document, and better-than-expected margin projections.

The shares closed up 14.5p yesterday, at 143p.

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