Sugar to make bid for Viglen
Saturday 10 October 1998
The move takes Mr Sugar's shareholding in Viglen to 41.7 per cent from 33.7 per cent, forcing him to mount a full takeover bid for the company at 24p a share - the price at which he bought the latest tranche of shares. A formal offer could be tabled as early as next week.
The news sent Viglen shares soaring to 22.75p, up 8.75p. Earlier this week they had fallen to an all-time low of 14p. Viglen's board recommended shareholders not to take any action.
However, it is not clear whether Mr Sugar, who is on holiday aboard his yacht in the Mediterranean, wants to take full control of Viglen. A spokesman said: "He thinks the shares are cheap and a good investment. City rules dictate he's got to make a bid, and if people want to sell he's got to buy them out."
Viglen was demerged from Mr Sugar's Amstrad group last summer after he broke up the business and returned the parts to shareholders. Mr Sugar had originally wanted to sell part of his stake in Viglen to institutional shareholders, but decided not to when he concluded that the price was too low.
Shares in Viglen have fallen sharply since the demerger, when they were valued at almost 90p, as the company has struggled with falling personal computer prices.
Viglen assembles PCs from imported parts before shipping them directly to consumers in the UK. As Dell, the huge US direct-sales group, has stormed the market Viglen has struggled to maintain its margins.
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