Sheffield launches 18m pounds bid for Freeman

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SHEFFIELD Insulations, the buildings materials group, has launched an pounds 18m bid for Freeman, a rival operator with particular exposure in continental Europe.

Sheffield is offering shares or a mixture of cash and loan notes. Freeman directors have recommended the bid.

Together with their pension funds and other associated shareholding trusts, Freeman directors speak for 57 per cent of the company.

The main business of the combined group will be the distribution and marketing of thermal insulation, fire safety equipment, architectural ironwork and PVC windows and doors.

Sheffield is promising eight of its own new shares for every nine Freeman shares. At the bidder's opening price of 270p yesterday, the offer valued Freeman shares at 240p. However, Sheffield shares rose to 288p, making the deal worth 256p per Freeman share.

The part-cash, part-loan note alternative is worth 225p a share. Sheffield is funding the alternative by placing shares at 256p.

Freeman shares rose 22p to 242p yesterday but have jumped from 204p since the company announced on 18 January that it was in bid talks.

Jim Potter, chief executive, will join the Sheffield board.

Sheffield also announced that pre-tax profits for the year ended 31 December would be pounds 9.75m - more than three times those achieved in 1992.

It also promised to pay a 3.6p final dividend, making a total of 5.4p, or a yield of 2.3 per cent.