Coats jumps 20% on possible cash bid

By Nigel Cope,City Editor
Friday 14 February 2003 01:00
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Coats, the British thread company with a history dating back to the early 19th century, saw its shares jump 20 per cent yesterday when it said it had received an approach about a possible cash bid.

The approach has come from a group of shareholders led by Guinness Peat Group, the shareholder activist, which holds a 25.3 per cent stake in the company.

No figure was placed on the possible bid but Coats is valued at £379m after yesterday's share price jump to 53.5p. Coats advised shareholders to take no action and said a further announcement would be made in due course.

Coats is the world's largest maker of thread with a turnover of about £1bn and production centres in more than 60 countries. It has been gradually shifting its production capacity away from the UK towards lower-cost centres overseas. It has also been streamlining its business and last month completed the sale of its Jaeger and Viyella clothing operations to Richard Thompson, the former Queens Park Rangers chairman, for just £1. It is also looking to sell Dorma, its bedding business, in order to focus exclusively on threads.

If Coats is taken private it will mark the end of one of the market's most historic names.It traces its roots back to 1824 when James Coats, a silk shawl weaver, set up a mill in Paisley, Scotland, to manufacture sewing thread. J&P Coats was listed on the London stock exchange in 1890. It merged with Vantona Viyella to become Coats Viyella in 1986.

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