US bid talks may bolster Spring Ram

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The Independent Online
SHARES in Spring Ram are expected to find fresh support today, after weekend reports that the troubled bathrooms and kitchens manufacturer is in takeover talks with Masco, one of America's largest building products groups, writes John Murray.

A bid would provide a welcome exit for investors, who saw Spring Ram's share price slide to 44p from a high this year of 145p.

The group, hit by recession, has issued three profits warnings in the past nine months. Accounting problems in a subsidiary led to the resignation of Stuart Greenwood, finance director.

Bill Rooney, the founder, bowed to institutional pressure last week, relinquishing the chairmanship to Roger Regan, former managing director of AG Stanley.

Mr Rooney, who has a 16 per cent stake in the business, remains chief executive, but institutional investors are believed to be happier with the balance on the board.

Mr Regan has appointed a new finance director - Martin Towers, formerly of McCarthy & Stone - and a new non-executive director, Richard Fortin.

The talks with Masco are believed to have been going on for some time but have yet to focus on price. The US company would be expected to pay a substantial premium to the current price of 54p, which values Spring Ram at just under pounds 200m.

Masco, which is quoted on the New York Stock Exchange, made profits of dollars 183m last year on turnover of dollars 3.5bn. It has appointed Hambro Magan, the corporate finance boutique, as an adviser and is understood to have begun due diligence inquiries.

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