The De La Rue Group, a long-standing player in banknote printing in the UK, is undergoing a strategic change of ownership. On April 15, the printer, which works for numerous central banks, accepted a £263 million (?315 million) takeover offer from US investment fund Atlas Holdings. The operation, which was unanimously recommended by the Board of Directors, provides for an exit from the stock market, and comes at a time when De La Rue is in the process of selling its Authentication division.
A sustained cash offer well received
The American company's offer values each De La Rue share at 130 pence, a 16% premium on the last closing price. The offer is made entirely in cash. According to the information made public, Atlas has already obtained firm commitments representing around 40.3% of the capital.
This follows several months of discussions in the context of a formal sale process. De La Rue shares gained over 15% on the announcement of the Board's formal support.
A superior counter-offer ruled out
A competing offer had been submitted by Disruptive Capital GP Limited and Pension SuperFund Capital, controlled by British financier Edi Truell. It offered a higher price (132.17 pence per share), but was based on a share-for-bond structure, conditional on the sale of the Authentication division and external financing.
De La Rue's Board of Directors rejected this proposal, deeming it too uncertain.
De La Rue, refocused on its trust business
De La Rue's Authentication division, which notably produces identification and traceability solutions, is already in the process of being sold to the American Crane NXT for 300 million pounds (350 million euros). It is not included in Atlas' offer. Completion of the sale is scheduled for May 1.
Following the transaction, De La Rue will remain focused on its cash activities, including the production of banknotes and polymer substrates. At the end of January, the order book of the Currency division, which includes these banknote activities, stood at 347 million pounds (404 million euros). De La Rue claims to supply around half the world's central banks.
