Scholl bemused by merger letter from French company

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The Independent Online
Scholl, the UK footwear and care group, said yesterday it was seeking clarification from a small, unlisted French company which sent it a letter raising the possibility of a merger.

It said the letter, which it received on Monday, was "extremely vague", and that there was no evidence that the French company would be in a position to implement an offer.

Scholl is currently under siege from a dissident shareholding group led by Julian Treger and Brian Myerson, two South African investors who run an investment fund, the UK Active Value Fund (Ukav). Mr Treger and Mr Myerson want Scholl to sell itself and have requisitioned an extraordinary general meeting at which they wish to depose three board members.

Ukav is also trying to force a restructuring at Signet, the heavily indebted jewellery group, which yesterday notified the Stock Exchange that it had recently become aware, through a filing in the US, that a group of its shareholders, including Ukav, is trying to take control of its board by replacing all or a majority of the company's directors while not intending to make a bid for the company.

Scholl has not identified the French firm but it said the letter had been sent to it at the behest of Mr Treger at Ukav. The board has been advised by its bankers, Samuel Montagu, that the letter does not constitute a serious takeover approach.

A statement said: "The proposal in this letter is extremely vague and furthermore the French company is unlisted, is much smaller than Scholl and no evidence has been produced that it is, or would be, in a position to implement any offer."

Gordon Stevens, Scholl's chairman, said: "We have been told by them there would be synergies from being taken over by a large international company. But all they have produced is a small-sized national business. Clearly we will take this approach seriously but we would have done that anyway," he said. "I cannot see that this justifies the fuss that is going on."

Scholl's circular to shareholders, which advises them to vote against the dissident shareholders' proposals, also knocks the credentials of those, including Mr Treger and Mr Myerson, who are being proposed as new board members for the company.

Mr Myerson, for example, is said to have been a director since 1987 of Euro Suisse Securities, whose published accounts reveal an aggregate consolidated pre-tax losses of pounds 726,516 on turnover of nearly pounds 9m.