Coats launches Hicking counterbid

COATS VIYELLA, the textiles group which owns the Jaeger fashion chain, yesterday launched a pounds 68m counterbid for Hicking Pentecost, raising the prospect of a bid battle for the knitwear and thread maker.

The 205p-a-share cash bid represents a 17 per cent premium on the 175p- a-share offered by its American rival Ruddick at the beginning of June. In a statement the US group said: "The company is considering its position and will make a further announcement in due course."

Kazia Kantor, finance director at Coats Viyella, responded: "We think we've made a very fair offer. We'll wait to see what Ruddick's board decide to do."

Analysts, said that a bid battle was now on the cards.

Joan D'Olier, an analyst at Deutsche Bank Alex Brown, said the focus had been on Coats demerging its businesses rather than making acquisitions. "It doesn't indicate a change of strategy. They can still demerge the non-thread parts of the business. They saw the opportunity to add a complementary thread business to theirs," she said.

Tudor Davies, chairman of Hicking Pentecost which employs around 1,000 people in the UK, said the interest reflected underlying value. "It's not surprising given the current situation regarding small cap companies," he said. Hicking Pentecost shares closed up 25p at 203.5p yesterday.