Cowie improves bid for Henlys

THE Sunderland-based car dealer T Cowie yesterday increased the terms of its hostile bid for Henlys, its ailing rival. It also offered a part-cash alternative.

The new deal values Henlys - which combines selling cars with building coaches - at pounds 30.3m.

The share offer is 40 per cent improved. However, because Cowie shares have slumped during the course of the bid, the new offer values Henlys at just 10 per cent more than at the outset.

Cowie shares were unchanged at 115p yesterday compared with 145p in June. The new offer of seven Cowie for 10 Henlys shares equates to 80.5p per Henlys share. Including the 40p part-cash alternative, Henlys shares are worth 77p. Henlys' market price yesterday jumped 7p to close at 76p.

Cowie also promised to pay a 4.25p final dividend, which would make a total for the year of 6.25p and mean the shares yielded 7.2 per cent. Henlys has promised to pay 3p this year, a yield of 5.9 per cent.

Gordon Hodgson, Cowie's chief executive, said: 'The acquisition of Henlys will create an enlarged group which is the fourth- largest motor dealership in the UK.'

He added that Henlys shareholders could benefit from Cowie's strategy of using the car dealerships to sell ex-company cars that Cowie has already bought and leased for profit.

Robert Wood, Henlys' chief executive, maintained his opposition to the bid. 'Cowie's offer is ill- conceived, it demonstrates a woeful lack of understanding of Henlys' businesses and it significantly undervalues Henlys' assets and prospects,' he said.

Acceptances for the unimproved offer were less than 1 per cent. Yesterday's offer is final.