Schroders error casts confusion over Cook bid
Tuesday 14 January 1997
The withdrawal is all the more embarrassing because Schroders, whose corporate finance division is acting for Triplex Lloyd , has a policy of deferring decisions on takeovers until the last possible moment, whereas SIM inadvertently agreed to throw its 5.44 per cent stake in Cook behind the bid at the first closing date.
"It's unsatisfactory," said a source at Schroders. "There is some corporate embarrassment that a colleague has made a mistake."
Schroders insists the error came to light only after the unusually high level of acceptances for the Triplex Lloyd bid on the first closing date became known. "When they [SIM] realised they had made a mistake they let both sides know," the source continued.
But Schroders could not explain how the error came about.
"As a matter of policy it should be inconceivable for this to happen," the source continued. Shareholders who do not wish to vote on a bid until nearer the offer deadline do not have to fill out any forms at the first closing date for acceptances.
SIM's withdrawal now means that just 0.39 per cent of William Cook's shareholders had accepted the Triplex Lloyd bid by New Year's Eve.
"I am glad shareholders are appreciating our strong arguments on value and prospects and how Triplex Lloyd's offer is derisory," said Andrew Cook, William Cook's chairman.
His comments, the latest in an increasingly heated war of the words, drew a stiff response from the Triplex camp.
"Andrew Cook knows perfectly well that the withdrawal of acceptances ... is the result of one shareholder who accepted the offer due to a clerical error. Andrew Cook knows this because the shareholder in question wrote to explain this to the chairmen of both Triplex Lloyd and William Cook. No other conclusion should be withdrawn from the withdrawal of the acceptance," a statement said.
Nevertheless, the episode is clearly a setback for Triplex Lloyd, who made much of the high level of acceptances at such an early stage of the bid. It also adds to the impression that the highly acrimonious bid, far from being the knockout blow that many analysts assumed at the outset, will have to be increased if William Cook is to lose its independence.
That is certainly what the stock market is suggesting. Triplex Lloyd is offering 309p in cash and shares, with a cash alternative of 295p, but William Cook's shares closed at 360p, up 2.5p.
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