SHV launches pounds 506m cash bid for Calor shares

SHV, the private Dutch company which owns the Makro cash-and-carry chain, yesterday launched a pounds 506m bid to buy out the minority shareholders in Calor, the bottled gas group which it first bought into nearly 10 years ago.

News of the 300p-a-share cash offer was rushed out after a surge in the price, which has risen from 242p since the middle of September and closed a further 6.5p higher at 297p yesterday.

One source close to the bid denied the movement had any connection with the purchase of 10,000 shares by Jan de Kleuver, a director, soon after the interim results were announced last month. Mr de Kleuver arrived from SHV earlier this year, but the source said the transaction had been cleared internally and he was sure it was "as clean as a whistle".

The cash bid, which includes a 40p special dividend payable from the company's own resources, is being recommended by the two independent directors on the Calor board, Michael Davies and George Duncan. Details of the offer, which will cost SHV pounds 246m, will be announced today.

The announcement follows an erratic trading performance over the past five years at Calor, which parted company with its former chief executive, Howard Robinson, nearly a year ago after a profits warning and announced a shake-up of the business in March. The group has formed a joint venture with Texaco in the South-west of England to compete in the market for domestic gas and is investing with SHV in fledgling bottled gas projects abroad, none of which are expected to produce quick returns. Advisers to both sides said talks between SHV and the two outside directors began last month following the realisation that the Dutch group's aims for Calor conflicted with the desire of many UK institutional shareholders for growing levels of dividends.

A spokesman for SBC Warburg, which is advising SHV, said the bottled gas business was mature, but margins were under pressure in a competitive market, so current cost-saving efforts might have to be repeated. At the same time, under co-investment arrangements with gas group SHV Energy, Calor had invested pounds 40m in areas such as Brazil, China, India and South- east Asia, with authority from shareholders to go up to pounds 90m or pounds 100m.

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