Forum Archive Index - February 2003

["DR" <hamish@webmail.visp.co.nz>]

13.02.03 :+8.75, (53.5) after the threads group said it had received an approach from a group of shareholders led by Guinness Peat Group PLC regarding a possible cash offer. Guinness Peat, the investment vehicle of Sir Ron Brierley, the corporate raider, holds a 25.3% stake in Coats. Blake Nixon, Guinness Peat's UK executive director, has sat on Coats' board as a non-executive director for the past three years. Sector analysts suggested 55-60 pence a share could be enough to take out Coats in the current depressed environment. In a statement in response to the recent movement in its share price, Coats said a further announcement will be made in due course and in the meantime shareholders should take no action. Over the past couple of years Coats has undergone a major restructuring with the aim of focusing entirely on threads. Most of the company's clothing manufacturing businesses have been disposed of and last month Jaeger and Viyella, its loss making fashion brands, were sold to an investment vehicle owned by Richard Thompson for an undisclosed nominal sum. The Jan 23 disposal coincided with the release of a trading update. Coats' thread sales in the six months to end-December 2002 were 8% ahead of the previous year at constant exchange rates, with a particularly strong performance from the group's Asian operations where sales grew 25%. It said the core thread business' 2002 operating profit (pre-reorganisation cost) is expected to be broadly in line with market expectations and modestly ahead of the previous year. Full year results are scheduled to be published on March 26.