United wins battle for Blenheim with pounds 592m agreed bid deckys

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The five month "phoney war" for control of Blenheim appeared to be over yesterday after United News & Media, the money broking-to-newspapers group run by Labour peer Lord Hollick, made an agreed pounds 592.3m bid for the exhibitions organiser.

The deal, coming soon after the pounds 3bn merger earlier this year between of Lord Hollick's MAI group and Lord Stevens' United Newspapers, will form the world's largest trade fair group with pro forma sales last year of pounds 545m and operating profits of pounds 88m.

"This merger creates a world leader in a fast-growing business-to-business sector," said Lord Hollick. "The fit between Miller Freeman [United's existing exhibitions arm] and Blenheim is remarkably good. The combination will create an exciting range of opportunities for future growth."

United said its 500p a share offer had irrevocable acceptances from investors speaking for 56.5 per cent of Blenheim. These included Blenheim's chairman, Neville Buch, whose near 6 per cent stake is worth pounds 26.7m; French utility Generale des Eaux with 15 per cent; and the American Ianuzzi family with 12 per cent.

The deal increases United's borrowings to pounds 625m, but the interest bill is comfortably covered over seven times by earnings.

In the City, analysts said United appeared to have won the fight for Blenheim at a very good price while United's assurances that the takeover will be earnings enhancing in its first year sent its shares sharply higher. They closed 40p better at 693.5p while Blenheim was 23p firmer at 496.5p.

The agreed offer should put to an end months of speculation about the future of Blenheim since its announcement in June that it was in talks that might lead to a bid.

Neither United nor Reed Elsevier, the Anglo-Dutch publisher also involved in protracted bid talks with Blenheim, ever publicly acknowledged their interest.

Reed is thought to have balked at paying over 480p a share for Blenheim after Mr Buch held out for at least 20p a share more. Mr Buch yesterday indicated that other parties had also expressed an interest in Blenheim but he declined to say who they were.

Lord Hollick said Blenheim was considered to be a takeover candidate "shortly after" the pounds 3bn merger of MAI and United Newspapers earlier this year. United later built up a 2 per cent stake in Blenheim just before initial talks between the two sides began in early June until a bid, believed to be 450p a share, was rejected by Blenheim.

Lord Hollick defended his handling of the bid process. "We steadfastly maintained a position of no comment throughout. We are a cautious and slow oak. We wanted to see Blenheim's interims [published on 2 October]."

He added that United was keen to avoid a contested bid. He also denied the timing of the deal had anything to do with VNU's dawn raid on Blenheim last week when the Dutch publishing group picked up a 14.99 per cent stake at 500p. VNU said yesterday it had no intention of launching a counter- bid.

Diary of the battle for Blenheim

28 May 1996 - Hefty dealings in Blenheim shares. Some 4.5m shares, or 2 per cent of the equity, change hands

5 June - Blenheim tells Stock Exchange it has received an approach from an unnamed bidder. United News & Media said to be in talks. Sources close to Neville Buch, Blenheim's chairman, indicate offers won't be considered below 500p. Shares soar.

7 June - United reportedly tables an offer of up to 450p

mid-June - mid-July - Detailed talks between United and Blenheim

19 July - Exclusivity agreement preventing Blenheim from negotiating with another potential bidder expires.

31 July - Reed Elsevier reportedly enters the fray, hiring Deutsche Morgan Grenfell as advisers

1 Aug - United reportedly suspends takeover talks with Blenheim; Blenheim tells Stock Exchange it is in talks that could lead to takeover

30 Aug - Takeover talks terminated with unnamed party, Blenheim tells Stock Exchange; shares slide

16 Sep - Blenheim announces it is back in takeover talks; Reed Elsevier believed to have made a renewed approach; shares soar

2 Oct - Blenheim posts more than doubled interim pre-tax profits of pounds 30.7m, up from pounds 13.1m. Keeps silent on progress of bid talks

8 Oct - VNU picks up 14.99 per cent stake in Blenheim at 500p during dawn raid

15 Oct - United News & Media agrees pounds 592.5m bid for Blenheim at 500p a share with acceptances for 51 per cent of the shares. VNU says it will not counter-bid