De La Rue Plc, the world’s biggest printer of banknotes, rejected an 896 million-pound ($1.4 billion) takeover approach from closely-held rival Francois-Charles Oberthur Fiduciaire SA.
Management refused to discuss Oberthur’s 905 pence-a-share cash proposal, presented on Nov. 10, the Paris-based company said in a statement today. That offer is 43 percent more than the close of De La Rue stock that day.
“Oberthur very much hopes that the board of De La Rue will agree to enter into substantive discussions, possibly leading to an offer which would benefit the company’s customers, its staff and its shareholders,” the company said.
In a separate statement today, De La Rue called Oberthur’s proposal “opportunistic.” The Basingstoke-based company had lost about one-third of its value this year prior to the proposal, after incurring a dent to earnings because of a deliberate breach in paper quality by some employees.
De La Rue rose as much as 211 pence, or 33 percent, to 858.5 pence, its largest gain since at least 1995, and traded at 847 pence at 3:33 p.m. in London, valuing the company at 838 million pounds.
The company is seeking a new chief executive officer after James Hussey resigned in August in the wake of the paper quality breach. Discussions are under way with a candidate, former Chloride Plc CEO Tim Cobbold, De La Rue said Nov. 24.
The 200-year-old company produces currencies for more than 150 nations as well as security documents including passports and fiscal stamps, according to its website. A limited number of customers were affected by the falsified paper quality certificates, De La Rue said on Sept. 7.
Oberthur, the third-largest private producer of banknotes, said it would look to make an offer that could be “the catalyst for restoring the company’s reputation.”
De La Rue announced in March it would sell its stake in Camelot Group Plc, the organizer of Britain’s National Lottery for 77.8 million pounds.
As of last week, 4.83 percent of De La Rue’s shares outstanding were on loan, according to Data Explorers analysis on Bloomberg, likely to short sellers. That represented a quarter of all stock available to borrow. Short-sellers borrow stock on expectations they can sell it and later purchase it back more cheaply before paying back the loan.