HELICOPTER maker Westland yesterday forecast a 15% boost in pre-tax
profits this year in a last-ditch attempt to fend off a hostile #500m
takeover bid by GKN, the defence equipment and industrial services
group.
The #35m prediction for the year to September 30 compares with #30.5m
in the previous 12 months.
Westland tempted shareholders to stay loyal to the present management
with the forecast of a 6% dividend increase to 4.75p per share, plus an
extra payout from money expected from a long-running legal dispute.
The cash is due from the settlement of claims relating to a cancelled
Middle East contract and Westland said it would distribute the proceeds,
starting with a special dividend of 5p per share next February.
''This is in contrast to GKN's proposal to withhold the first #82m for
its own benefit,'' Westland, which is based at Yeovil, Somerset, told
shareholders in a last defence document issued today.
Chairman Alan Jones dismissed the GKN offer as wholly inadequate and
said the current management team had delivered outstanding results over
the last five years.
GKN, based at Redditch, Worcestershire, already controls almost 45% of
Westland and needs only just over another 5% of its shares to take over.
It has until next Monday to make its final offer, but will probably
retaliate to the Westland forecasts within 72 hours because of the
upcoming Easter holiday weekend.
GKN has had its eye on Westland for several years. In 1988 it bought a
28% stake with a view to taking it over, but the end of the Cold War
prompted concerns about future defence orders, putting bid prospects on
ice.
However, it now reckons the long-term outlook for Westland, under GKN
control, is bright with battlefield mobility -- in which helicopters
play a vital role -- becoming a key part of future defence strategy.
Alan Jones dismissed the GKN offer as wholly inadequate and said the
current management team had delivered outstanding results over the last
five years.
GKN, however, dismissed the last-ditch defence document and declined
the chance to raise its #500m bid.
GKN said Westland's profit increase had largely been achieved by a
one-off property sale and operating profits were actually forecast to
fall by #500,000.
''There is little new of any substance in Westland's document, and
what there is must be disappointing for Westland shareholders,'' it
said.
Sir David Lees, chairman of GKN, added: ''We find it remarkable that
Westland could provide nothing more at this stage of the bid. There is
nothing in it to change our view of the value of Westland.''
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