Oberthur plays nasty with De La Rue offer

FRENCH money-printer Oberthur Technologies tried yesterday to stir up a row among shareholders of its takeover target, De La Rue.

On the first day for De La Rue’s new chief executive Tim Cobbold, Oberthur said the company had lost its largest client, the Reserve Bank of India, and called on the board to inform shareholders. “The tender for the supply of 16,000 tons of currency paper by the Reserve Bank of India has been awarded to four competitors of De La Rue,” Orberthur said.

The four competitors in question are Arjo Wiggins, Louisenthal, Crane and Fabriano, said an industry source. The person also said that Oberthur had learned of the contract decision through the grapevine in the money-printing community.

In response, De La Rue stated its contract with the client in question is still up in the air, with negotiations “ongoing”. But RBI’s decision not to invite its former printer to pitch for the new contract suggests that it is keen to replace the company.

The likely loss of RBI is a severe blow for De La Rue, meaning it is would miss out on several thousand tons of business – a significant proportion of its annual banknote production of around 15,000 tons. However, since its contract with RBI was suspended in July last year, it has won new contracts to put volumes for 2010 on a par with those in the previous year.

Shareholders will now be on the receiving end of a campaign of phonecalls from both Oberthur and De La Rue as they attempt to persuade them of the pros and cons of the 905p bid. De La Rue’s board is said to be set on a price over £10.

The privately held Oberthur, which approached De La Rue in early December with a bid, has been courting shareholders ever since its offer of 905p was rejected as “opportunistic”.