Atlas already has interests in the industry. Its portfolio of seven packaging, pulp and paper businesses includes LSC Communications, ASG (which trades as Spark), Twin Rivers Paper and Crown Paper Group.
This morning (15 April) De La Rue’s board announced that it was unanimously recommending the 130p a share offer from Atlas vehicle ACR Bidco.
However, Sky News also reported today that a higher bid of 132.17p a share from financier Edi Truell’s Pension SuperFund Capital could be in the offing.
Before Christmas De La Rue had been in discussions with Disruptive Capital GP and Pension SuperFund Capital (PSFC) entities about a possible 125p-a-share deal for at least 30%, and up to 40% of the business.
De La Rue’s Authentication division is in the process of being acquired by US company Crane NXT in a separate £300m deal and does not form part of the Atlas sale.
Its remaining Currency business – which includes the contract to run the Bank of England printworks at Debden – had orders worth £347m on its books at the end of January.
De La Rue took over the operation of the BoE printworks in April 2015. That arrangement was originally set to expire this year, but in 2020 an agreement was reached to extend the deal until 2028.
Its Currency wing prints banknotes for half of all central banks worldwide and had sales of £207m in the 2023-24 financial year. It also makes banknote polymer.
Atlas operating partner Peter Bacon said the group was pleased its offer had been recommended and looked forward to welcoming the De La Rue team to the Atlas family.
“In De La Rue, we see a company that is an industry leader, but one which has faced multiple challenges in recent years,” he noted.
“We believe that our strategic resources and capital will be able to support and enhance the De La Rue business going forward. As a private company, not bound by periodic public reporting, we will be able to focus on the optimal long-term strategy for De La Rue.”
The 130p a share offer represents a 19% premium on the closing price of De La Rue’s shares on 11 December, the last business day before the offer period commenced.
However, the offer price is lower than the 150p a share target price previously cited by Richard Bernstein of activist investor Crystal Amber, De La Rue’s biggest shareholder.
Bernstein had also flagged the potential for a bidding war last month.
As of yesterday, ACR Bidco has received irrevocable undertakings representing approximately 40.3% of De La Rue shares.
Atlas has also reached an agreement with De La Rue’s pension trustees to protect planned payments of £32.5m into the scheme after the Authentication sale completes – which should be on 1 May – and a further £4.5m falling due this month.
“From 2032, the De La Rue Defined Benefit Pension Scheme is expected to be fully funded on a low dependency basis and De La Rue will then fund to an even stronger basis agreed with the Pension Trustee by 2035, with Atlas providing security for those payments,” the announcement stated.
De La Rue’s pension scheme had a £78m deficit at September 2023.
The PLC had deferred deficit repair contributions since April 2023 because of its financial issues.
De La Rue’s history dates back to 1813 when Thomas De La Rue established a newspaper on Guernsey, before subsequently setting up in London and moving into fancy stationery.
The group listed on the stock exchange 78 years ago.
De La Rue closed off its FY2024-25 at the end of March.
Shares in De La Rue were up 15.28% at 129.11p on the news (52-week high: 133p, low: 77.40p).
Update: in response to news of the possible rival bid, De La Rue issued a statement and said its board had taken into account the preliminary and conditional nature of this latest proposal from the PSFC Entities, including the absence of committed financing.
“There can be no certainty that any firm offer will be made by the PSFC Entities.”
The board re-affirmed its recommendation that shareholders should vote in favour of the all cash acquisition by Atlas.
