Novar to reject £625m Melrose bid
BRITISH manufacturing group Novar will reject a £625m bid from UK investment company Melrose, sources familiar with the situation said this morning.
Novar had already said on Wednesday that a possible bid from the investment vehicle at between 140p and 150p a share was 'unappealing'. Melrose this morning submitted an offer valuing the company at 145p per share.
Melrose said that it was offering 1 new Melrose share and 45p in cash for each Novar share. It said the cash element of the offer represented a 36% premium to Novar's closing share price on November 3, the last day before Melrose first said it was considering bidding for Novar.
Novar has suffered from falling profits amid tough trading conditions in its main north American markets, and Melrose attacked the company's management for contributing to what it called Novar's poor share price performance and declining margins.
'We are very pleased with the enthusiastic support of major institutions for our proposal,' Melrose Chairman Christopher Miller said in a statement.
Earlier this week, Novar said that a possible Melrose bid was unappealing. Novar added that it had already received takeover interest from other parties.
Novar shares, which have surged in recent weeks, closed at 146p on Wednesday. Melrose shares closed at 132 1/2p.
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