Doulton agrees takeover deal

WATERFORD WEDGWOOD yesterday struck a takeover deal with the board of Royal Doulton that values the British chinaware manufacturer at €58 million.

The crystal and ceramics company said yesterday that the 12p per share takeover would give Royal Doulton shareholders 43% more than their stake was worth in October, when the deal was first outlined.

The agreement came a day after Waterford shareholders gave the go-ahead to the €100m rights issue necessary to fund the takeover. They will be offered the right to buy five shares for every three they own, at a discounted price of 6c per share. Waterford shares fell 0.6c, or 7%, to 8c yesterday.

Chairman Tony O’Reilly said the takeover would transform Waterford Wedgwood. “The benefits are immediately apparent. We can add Royal Doulton’s revenues to our own revenues without greatly increasing our costs,” he said.

Waterford’s logic for the takeover stems from the opportunity to use spare capacity at its Wedgwood manufacturing plant in Britain to make products that previously came from Royal Doulton’s plant.

Royal Doulton signalled earlier this year that it planned to close its plant in Britain to move production to the Far East. The combined entity will also benefit from integrated administrative functions, greater purchasing power and savings from improved selling and distribution arrangements.

The takeover already has the approval of shareholders owning 27% of Royal Doulton. Waterford holds 21% of the company, while Dr O’Reilly and fellow Waterford director Peter Goulandris hold a further 4% between them. Royal Doulton directors, who own 2% of the company, also threw their weight behind the bid yesterday.

Waterford will hold an extraordinary general meeting to allow shareholders vote on the deal next month, while Royal Doulton shareholders have until the middle of the month to accept the offer.

The company said the rights of Royal Doulton employees would be “fully safeguarded” if the takeover proceeds, while Royal Doulton’s chief executive and finance director would take senior management roles in the enlarged group’s British operations. Former HJ Heinz vice-president David Sculley will oversee the integration.