Burnfield rightly countered that Fairey's choice of period was highly selective, as they always are in hostile bid situations, and attempted to put forward its own three-year period, starting at the company's recent low point when it parted company with its previous chief executive. As always, a hostile bid has drowned hapless investors in a torrent of innuendo and half-truth.
The real story is, not surprisingly, a combination of the two sides' arguments, but Fairey wins on points. Burnfield has made some pretty awful acquisitions along the way, resulting in a hefty pounds 12m exceptional charge that will send it pounds 8m into the red this year. It has a poor history of disappointing shareholders with profits warnings and has seen its earnings per share go nowhere in the past five years. After a collapse in its dividend in 1993, the payout has edged upwards but is only a little more than half the 1992 level.
Against that backdrop it is now attempting to sell a pounds 20m seven-for- 10 rights issue to shareholders to fund an acquisition into a new area, vibration control equipment. The City reaction to the deal - 10 per cent off the share price to 100p - tells the story.
Normally the best thing to do in a bid like this is to wait for the arguments to unfold. In this case, that is not possible because Fairey says it will only go ahead with the one-for-four share bid if shareholders vote down the proposed acquisition and rights issue on 30 December. So, shareholders have to make a snap decision. Faced with stumping up pounds 630 for every pounds 1,000 of shares they own, the temptation to snatch a decent premium at yesterday's close of 141.5p is enormous. Sell in the market.