Newsquest confirms P&S takeover talks
Saturday 06 February 1999
Newsquest last night issued a statement confirming its intent after the competition minister, Kim Howells, decided to refer Johnston's proposed acquisition of P&S to the Monopolies and Mergers Commission. Following that decision, Newsquest has asked the Department of Trade and Industry for a similar reference that would allow a Newsquest bid for the group to be considered at the same time.
P&S shares rose 25p to 1,725p yesterday, valuing the company at over pounds 200m.
Sources close to Newsquest insisted last night that the request should not be read to mean the group would definitely make an offer for P&S. "This is a matter of keeping our options open in the event of our making a bid," said a source.
There is little doubt that Newsquest has the firepower to pull the deal off. Although the group is heavily geared, analysts said it had a strong cash flow and an unused bank facility of pounds 150m at its disposal.
Johnston said earlier this week that it would press on with its bid for P&S despite the failure of its tender offer for 10 per cent of the group. Johnston already holds 14.99 per cent.
Charles Villiers, who built up the local newspaper interests of Scottish Radio Holdings, has confirmed he is putting together a bid for the entire group.
P&S said: "We welcome all interest. We do not have anything such as a favoured bidder. There are certainly others out there."
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