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Shares in De La Rue, the 200-year-old British firm that prints banknotes for the Bank of England, have surged after it confirmed it was in talks about a possible takeover offer from a well-known City financier.
Investment funds controlled by the pensions and private equity entrepreneur Edi Truell have made a conditional offer for De La Rue worth 125p a share, valuing the company at £245m.
The deal would be conditional on the completion of De La Rue’s planned £300m sale of its authentication division to Crane NXT, which was announced last October.
De La Rue said in a statement to the stock market that its board was “considering its options”.
The firm said in December that it had been approached by Truell and companies he founded about a partial takeover, of 40% of the business.
On Thursday, its shares jumped by as much as 12% to 115p a share on Truell’s interest in a full takeover, which was first reported by Sky News, to give the company a market valuation of £215m.
De La Rue has faced a string of challenges, including a widespread fall in the use of cash, which accelerated during the pandemic, and it has issued multiple profit warnings over the past few years.
The company stopped production of banknotes and UK passports at its plant in Gateshead in 2020 after it lost out on the contract to print post-Brexit blue passports to the Franco-Dutch company Gemalto.
The conditional offer from Disruptive Capital GP and Pension SuperFund Capital (PSFC), founded by Truell, represents a premium of around 25% on De La Rue’s share price before his interest in a full takeover emerged.
Truell’s companies have a “put up or shut up” deadline of 5pm on 6 February to announce a firm intention to make an offer for De La Rue, or walk away, in line with UK takeover rules.
Truell said he believed the takeover, combined with the cash raised by the sale of De La Rue’s authentication division, would allow the company to pay down some of its debt, stabilise the business and focus on bidding for orders to print banknotes for countries around the world.
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“There is significant demand for banknotes,” Truell said, especially in Africa and the Middle East “where for hundreds of millions of people it’s the only way they can buy things to live”.
Now based in Basingstoke, Hampshire, De La Rue was founded as a printing business by Thomas de la Rue in Guernsey in 1813, before setting up in London a decade later selling straw hats and stationery.
It has a contract with the Bank of England to run the central bank’s printing facility in Debden, Essex, and was involved in printing millions of new banknotes featuring the image of King Charles before his coronation.
De La Rue said on Thursday it was continuing discussions with other parties about the sale of its currency division, but said it could not be certain that “any such proposals may be made”.
