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De La Rue shares spike as it confirms takeover talks

Shares in UK banknote producer De La Rue rose sharply today after it confirmed it was in talks about a possible takeover offer with two bodies linked to prominent financier Edi Truell.

The London-listed company’s stock was up more than 8% at the time of writing on news of a potential £1.25 per share offer from Truell's Disruptive Capital GP and Pension SuperFund Capital groups – collectively known as the 'PSFC entities'.

It would be conditional on various factors, including the previously announced £300 million sale of its authentication business to Crane NXT.

That agreement came a few months after the 200-year-old UK firm confirmed that it had put its authentication and currency businesses up for sale, saying that its ability to continue as a going concern was at risk.

The new conditional cash offer follows a partial offer from the investment groups for 40 per cent of the business, first disclosed in December, and would value De La Rue's currency unit at roughly £245 million.

De La Rue had set a deadline of 5pm tomorrow, UK time, for a formal offer to be made by Truell, although in light of the amended offer that has now been extended to February 6. It also said discussions regarding the sale of the currency division are advancing with other interested parties, but that there is no certainty that any other offer will be forthcoming.

In December, De La Rue reported operating profit of £7.3m on revenues of £94.9m for the first half of fiscal 2023/25, down from £113.4m a year earlier, but added that its currency order book to the highest levels seen for at least the last five years.

Chief executive Clive Vacher – who was brought in in 2019 to turn the business around – said at the time that the business was "well positioned to take full advantage of an improving market, with a substantial upward step change in activity in 2025 and beyond."

De La Rue started to see a downturn in its fortunes after it lost the contract to print the UK passport in 2020, with additional pressures coming into play since then including a black hole in its pensions pot – plugging that was part of the reason for taking out hefty loans in recent years – and a publicised spat with its auditor Ernst & Young in 2022.

Completing the sale of the authentications unit – which provides tax stamps, security labels and other technologies – would allow the company to pay down a £235m revolving credit facility that becomes payable in June.


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