Pension fund deals a bodyblow to Kalon bid

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The Independent Online
BRITISH Steel Pension Fund, the single largest shareholder in Manders, the paint, ink and property company based in Wolverhampton, will not accept the hostile bid from Kalon.

BSPF speaks for 22 per cent of Manders, and its decision to spurn Kalon will make it difficult for the bid to succeed.

A spokesman for BSPF said yesterday: 'We have no intention of accepting the Kalon offer.'

It is unhappy that so much of the offer is in shares, and said the price was not high enough given the Kalon share price.

The bid, valuing Manders at pounds 85m, closes on Friday and has acceptances to date from 6 per cent of the shareholders.

The attractiveness of the Kalon bid has suffered because of the recent sharp falls in the stock market. When Kalon launched its assault in the second week of June its shares stood at 110p. By yesterday they had slumped to 82p.

At the outset, Kalon's eight-for- three offer valued Manders at pounds 106m. Kalon improved the terms last week, but the value of the bid is still 20 per cent below that at launch. However, a spokesman for Kalon said last night the group was still confident of victory.

Kalon yesterday wrote to Manders shareholders, urging them to accept the offer, which has a partial cash alternative. Roger Boissier, the Kalon chairman, said: 'I know the decision to change allegiances is difficult and can appear disloyal. However, I believe you have given Manders' management every opportunity to prove their worth, and they have failed.'

Manders countered by criticising Kalon for not giving a profit forecast for this year. Roy Amos, Manders chairman, said: 'That suggests to me its profits may be beginning to decline.'

Manders shares stand at 211p, 20p below the value that the Kalon offer implies. The gap indicates that, even before news that BSPF was going to reject the offer penetrated the stock market, there were doubts about prospects for success.

Analysts believe the Manders share price would drop from its current level of 211p to about 150p if the bid fails.

It is also thought that if other shareholders follow BSPF's lead, it will render Manders 'bid- proof' in future.

At yesterday's price, BSPF's stake in Manders is worth pounds 17m. BSPF has total assets of pounds 4.5bn.