US offer on cards for Southern

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The Independent Online
One of two US companies is believed to be lining up a takeover bid for Southern Business Group, the photocopier and vending machines company. The potential suitors are said to be Alco Standard and Danka Business Systems, its main rival in America.

Southern's shares rose 5p to 64p after the company announced it had received an approach that might lead to a bid. The company's stock market value is almost £62m, down from the £100m it was worth last year before investors were unsettled by a sharp downturn in profits.

Roger Limpenny, joint managing director, declined to comment further, although he said the approach was unsolicited. A year ago, Martin St Quintin, chief executive of Danka's operations in the UK, said informal discussions had taken place then with Southern.

Many industry observers at the time interpreted that to mean Danka was about to bid. The US company was forced into issuing a denial to end the speculation, saying that it liked to talk with all its competitors.

Danka gained a listing on the London stock market in 1993 as a precursor to a series of acquisitions. It would not comment yesterday on a possible bid, although it is known it would be keen to buy a company the size of Southern.

Alco, equally acquisition-minded, cemented its foothold in the UK through the £67m takeover of the Erskine House photocopying group nearly two years ago.

Southern saw pre-tax profits dive from £12.1m to £7.2m in the year to last September. Turnover dipped from £57.7m to £53.5m.