Gehe comes back with same offer

Gehe of Germany yesterday renewed its assault on Lloyds Chemists with a pounds 651m bid which almost exactly matches the rival offer from UniChem. The 500p a share all-cash bid is being made on almost the same terms as an earlier offer which lapsed when bids from both Gehe and UniChem were referred to the Monopolies and Mergers Commission.

The move was not unexpected and comes just ahead of the Friday deadline set when the Department of Trade and Industry gave the conditional go- ahead for renewed bidding last month. But the level bid was lower than some analysts had been forecasting and Lloyds' shares slipped 5.5p to 511p.

UniChem chief executive Jeffrey Harris said he saw no reason to raise UniChem's bid in the short term but did not rule out returning with a higher offer. "At least the gloves are off now and we know what we are up against. The best thing is the bounce in the UniChem share price, which clearly shows that our institutional shareholders are behind us."

Lloyds' shares remain well clear of both offers, with the UniChem bid valuing them at 501p after a 3.5p rise in its own share price to 255p yesterday, leading some observers to suggest that the German offer would not necessarily clinch a deal. Kevin Scotcher of NatWest Markets said: "This is an opening shot, from what I can gather. It is certainly not a final offer, so we can't assume it is their last offer."

Tony Cooper of Greig Middleton said he was slightly surprised that Gehe had come back at the same level as before. "It has left UniChem with a little bit of a free hand. If they are keen to acquire this ... they could come back and take this now."

The Gehe bid was accompanied by renewed claims that the value of Lloyds had been impaired since the previous bid battle. Dieter Kammerer, the Gehe chairman, described the renewed offer as "notably generous, given the deterioration in Lloyds Chemists' performance in the last financial year." He claimed the cash offer provided certainty of value against UniChem terms which consisted largely of shares.

The German group launched a wide-ranging attack on UniChem's claims concerning the takeover. It said the pro forma gearing would rise to more than 350 per cent. It also questioned its rival's assumptions about the potential synergies, saying they were "optimistic".