City File: Erskine alert

THE Stock Exchange is understood to have taken a long, hard look at share dealings in Erskine House, the office equipment supplier that has received a pounds 67.4m recommended offer from its American rival Alco Standard.

In what looks like a remarkable stroke of luck, six directors bought shares at between 28p and 37p just a few weeks before Alco came in with last week's offer of 90p a share.

Brian McGillivray, Erskine's chairman, told the Independent on Sunday that the company's merchant bankers had spoken to the Stock Exchange this week to dampen any suspicions.

Mr McGillivray, whose purchase of 100,000 shares at 30.75p means he stands to make pounds 59,000 from the deal, said the first anyone had heard from Alco was on 7 May. This was more than a month after the last share purchase by a director.

The directors bought the stock in March when the shares fell on a warning about future trading. 'Not only were the shares undervalued,' Mr McGillivray said, 'but we thought it would be a sign of faith in the company.'