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Rolls up bid for Foden
Page 6
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ROLLS-ROYCE has increased its bid to take over Fodens to the tune of E10.9 million after less than three per cent of shareholders rejected an earlier £7.9 million offer.
But reaction from Fodens chief executive William Foden was still one of caution.
He did not want to discuss the bid until his board meets.
In a statement, Rolls-Royce says that it is confident that the new offer values Fodens at "prices unlikely to be seen in the market should the offer lapse."
Even so, it was thought that the offer would be turned down by the Fodens board and they are believed to have the capacity to fight off the bid.
terms of the new bid are four ordinary Rolls-Royce 25p shares for every five ordinary 50p Fodens shares and 16 ordinary Rolls shares for every five Fodens preference shares at V. each.
Since the first bid was announced, Fodens shares have gone up on the London Stock Market by an average of 80 per cent to 52.8p for the ordinary shares and 211.2p for the preference shares.
Rolls has already said that if the bid was successful, Fodens was the right material to form a "significant fourth element to the Rolls-Royce Group".
Already the two companies have a customer and supplier relationship with Rolls selling its 265 engine for the larger Foden vehicles.
But Rolls also has a 17 per cent shareholding in Gardner — the major supplier of engines to Fodens.
The t. oueos document issued in defence of the previous bid showed that the company has recovered from its previous financial troubles which led to it being rescued by a City conglomerate after refusing Government money to keep going.