Oberthur bid for De La Rue rejected

08 December 2010

De La Rue has rejected as “opportunistic” an approach by French firm Oberthur Technologies to buy the firm – despite an offer well above the UK security printer’s share value. Analysts now expect a game of cat and mouse for De La Rue, including the emergence of other potential suitors – Giesecke & Devrient being a possible contender.

A sale is far from being a foregone conclusion, however. The Board of De La Rue has thus far refused to enter into discussions and rejected Oberthur’s approaches, including an indicative all-cash proposal, put forward on 10 November 2010, at 905 pence per share (yesterday the stock closed at 847p, although the offer was 65% higher than the share price on the day the offer was originally made).

Analysts told SDW that De La Rue has been vulnerable ever since it became clear it is in danger of losing its largest client, the Reserve Bank of India, due to quality issues.

Commenting on the approach, Nicholas Brookes, Chairman of De La Rue, said: "De La Rue is a unique company and has world leading positions in growth markets with high barriers to entry. We are addressing the current issues, which should not detract from the attractive medium and long-term prospects for the Company. The Board had no hesitation in rejecting this highly opportunistic and preliminary proposal which does not begin to reflect De La Rue’s fundamental value."

De La Rue executives at the Cartes show in Paris were being tight lipped – with “no comment” being the phrase of the day.