Doulton accused Waterford of attempting to "gain control by the back door" after the Irish glassware and ceramics group took a 14.9 per cent stake in the ailing pottery company last week.
Waterford said at the time that it did not anticipate that the strategic purchase, at a price of pounds 11.14m, or 90p a share, would lead to a full takeover offer unless one of its rivals made a move. Analysts say the move was aimed at fending off an outside bidder for Doulton, who could provide WW with unwanted competition.
Doulton said yesterday: "The board ... considers that the taking of a substantial minority stake by a major competitor when coupled with the stated intention not to make an offer to all shareholders is unlikely to operate in the best interests of Royal Doulton shareholders." It is understood that Doulton's chairman, Hamish Grossart, objected to the "rather hostile way in which the [WW] stake was taken".
The UK company has engaged Lazard Brothers and Cazenove & Co to "advise on the range of strategic options ... to realise the value of its outstanding brand portfolio and strong positions in major markets to the benefit of all its shareholders". It is understood the company is approaching both trade and financial buyers to discuss a takeover of all or part of the company.
Doulton, whose brands include Minton and Crown Derby, is said to be "very, very keen to avoid" the prospect of Waterford increasing its stake without making a full bid for the company. Under Stock Exchange rules, Waterford is entitled to increase its holdings to 29.9 per cent before it is obliged to make an offer for Doulton's entire issued share capital. This level of control could allow WW to block Doulton's plans to restructure the group or sell its interests to an outside party. One analyst said: "Royal Doulton is not just going to sit meekly with Waterford saying that it is not going to bid". He said the WW stake has left Doulton "in a very difficult position" with regard to its future plans.
A Waterford Wedgewood spokesman said: "WW sees the acquisition as a strategic investment. It is also an opportunity for close co-operation and the cross- fertilisation of ideas."
Royal Doulton made a loss of pounds 14.4m in the first half of the year and this month warned that delivery problems had cost it a further pounds 10m to pounds 12m in sales.
Doulton shares closed up 1p at 90p. Waterford shares ended the day unchanged at 0.94 euros.Reuse content