GPG joint venture makes offer for leading thread maker

By NZPA

Friday 7th March 2003

Guinness Peat Group shares spiked 6 percent this morning after news that a British joint venture it is part of is making a cash offer for the world's biggest industrial thread company, Coats Plc.

GPG said its 50 percent joint venture, Avenue Acquisition Plc, had made an offer of 58.5 pence per share to Coats shareholders -- 56p plus a special 2.5p dividend subject to the offer going unconditional.

The price is a 30.73 percent premium to Coat's closing price of 44.75 pence in mid-February, and values the company's entire issued shares at Stg414 million ($NZ1.19bn).

GPG shares rose 9c to $1.50 before slipping back to $1.48 in mid-morning trading.

Coats' board has recommended shareholders accept the offer, but says it will not be recommending they elect to receive a convertible stock alternative.

Avenue Acquisition is newly-formed by a consortium comprising of GPG, RIT Capital Partners plc, associated parties, and Chapman International Investments Limited.

Avenue Acquisition and the consortium jointly hold 36.07 percent of Coats shares already.

Gary Weiss, a director of GPG and Avenue Acquisition said the opportunity was "an exciting acquisition for the consortium and we look forward to working with management towards realising the potential that we believe is inherent in the thread business".

Coats chairman Sir Harry Djanogly said the offer would enable the company to move forward with its current strategy.

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