Watmoughs finds white knight and shares soar in value

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The Independent Online
The battle for control of Watmoughs took a new twist yesterday as the printing group, which has been resisting a pounds 188.3m hostile offer from Canadian rival Quebecor, announced that it was in talks with a potential white knight.

Shares in Watmoughs surged 46.5p to 320p as the company announced that it was in talks with an unnamed bidder which could make a cash offer of "substantially" more than 300p per share. Quebecor's offer stands at 257p.

The identity of the bidder remains a mystery. Analysts suggested that American printers RR Donnelley & Sons and World Color were the most likely candidates. Roto Smeets de Boer, a Dutch firm, was also linked with Watmoughs but denied that it had made an offer.

Quebecor pointed out that its bid was still awaiting regulatory clearance and that it would "clarify its position" once the Office of Fair Trading and Department of Trade and Industry had ruled on the bid. Analysts have long argued that Quebecor would have to raise its bid in order to win approval. However, many thought that an offer around 290p a share would be enough to win the contest. Watmoughs' share price has traded above 257p - the level of Quebecor's offer - ever since the bid was first announced.

The arrival of a white knight surprised many observers. Watmoughs has consistently argued that it would be best placed to realise value for shareholders if it remained as an independent company.

But few shareholders believed that the management team was strong enough to replace chief executive Patrick Walker, who came back into the job from semi-retirement last year, when he steps down.

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