Speculation on the identity of the potential bidder focused on De La Rue, the world's largest banknote printer and a leading customer for Portals' paper. Another candidate was Arjo Wiggins Appleton, the Anglo-French paper maker.
Portals, forced to reveal the approach by a sharply rising share price, recently reported profits for 1993 of pounds 31m, a 22 per cent increase.
David McCrossan, a paper and printing analyst at Kleinwort Benson, said he would be surprised if the bidder turned out to be De La Rue as that company had always insisted it did not want to move into paper-making.
However, De La Rue is the only security printer among its key UK and international competitors not to be vertically integrated with its own paper-making operation.
Les Cullen, finance director at De La Rue, said the company did not comment on bid rumours. 'We know Portals extremely well,' he said. 'We enjoy an excellent relationship with them.'
Asked about the company's previous disavowal of interest in paper-making, Mr Cullen said: 'It may have been said in the past. I'm not sure I've heard it said recently.'
Thoughts of a bid from De La Rue initially cut its share price from 885p to 872p, though it later recovered to close at 878p. Arjo Wiggins ended the day at 297p, down 1 1/2 p.Reuse content