Wassall expected to boost Evode offer within days

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The Independent Online
WASSALL, the mini-conglomerate, is expected to increase its offer for Evode, the adhesives group, within the next few days.

Chris Miller, Wassall's chief executive, said a decision would be made shortly. 'Our final offer will reflect what we believe the business is worth,' he said. He said Wassall's decision would not be influenced by the possibility of a white knight emerging.

Yesterday Evode published its final defence document in what one analyst described as 'a finely balanced bid battle'.

Evode's shares, at 103p, remained almost 29 per cent above Wassall's 80p cash offer. City sources said Wassall would have to bid at least pounds 1 to seal the takeover.

Evode's document dismissed Wassall's 'alarmist claims' about its financial vulnerability. The company said it was not due to start redeeming its dollar preference shares until the last quarter of 1996, and that it had bank facilities of pounds 72m.

Wassall has until next Monday to increase its 80p cash offer. Mr Miller described Evode's document as 'strident but thin'. He questioned the lack of a profit forecast or a trading statement.

But Andrew Simon, Evode's chairman, said: 'Our view is that it is not sensible to make profit forecasts when we only have full figures for two months of our financial year.'

He said the company's full-year results had just been published in December and profits were well ahead of City forecasts.

David Ingles, an analyst at James Capel, said that Wassall now had either to increase its bid or recognise it would not succeed. 'But although Evode has reasonable recovery potential, it would be difficult to defend the record of recent management if there were a decent bid,' he added.

Other observers said that there was a danger of Evode's share price falling back sharply if Wassall walked away. 'It's a bit of a poker game,' one stockbroking analyst said.