Bid approach sends Blenheim shares soaring

Blenheim Group, the exhibitions company which has experienced wildly fluctuating fortunes in the past five years, was at the centre of bid speculation yesterday after the company said it had received an approach that might lead to an offer.

Blenheim shares soared 70p to 409p as the market settled on United News and Media as the most likely candidate to make a move. Other possibilities include Reed Elsevier, Emap or an overseas suitor, possibly from the United States.

If United did succeed with the deal it would be its first acquisition since the pounds 3bn merger between United and MAI in February. United's shares ended 19p down at 707p yesterday.

The current price values Blenheim at pounds 378m, though any formal offer is likely to be at a far higher price as it would need to be an agreed deal. A third of Blenheim's shares are held by the directors and the French group Companie Generale des Eaux. Some analysts suggested that an offer price could have to be as high as 470p per share.

After its initial statement, made to explain the sharp rise in its share price on Tuesday, Blenheim declined to comment further yesterday.

Blenheim has led a rollercoaster existence in recent years. It was one of the market's glamour stocks in the late 1980s and early 1990s when the share price hit 600p. The company's flamboyant management, led by current chairman Neville Buch, then claimed the company was recession- proof, a comment that came back to haunt them. Recent years have been littered by profits warnings and top level departures as the company ran into the downturn. More recently, however, there have been signs of improvement and analysts are forecasting profits of pounds 35m.

United News and Media is seen as the most likely predator as it is known to be keen to expand its exhibitions business. At the time of the United- MAI merger, MAI chairman Lord Hollick indicated that there was scope to expand the group's exhibitions business.

Reed and Emap have looked at Blenheim before but at much lower prices than these. Anthony de Larrinaga, media analyst at Panmure Gordon said: "The ball is in Lord Hollick's court. Either he can come in quickly with an offer or go away and pretend nothing happened."

United's exhibitions and magazines division, Miller Freeman, organised more than 200 exhibitions last year. Last year the exhibitions business recorded profits of pounds 24.6m on sales of pounds 93.6m.

It is strongest in the US while Blenheim is a major player in the UK and Europe. Blenheim organised around 200 shows in more than 62 countries last year.