Suitor may sweeten bid for Premier Farnell

Takeover target Premier Farnell
Takeover target Premier Farnell
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Swiss technical and electronic components distributor Daetwyler has left the door open on sweetening a bid for Leeds-based Premier Farnell after a rival offer submitted by US group Avnet.

Premier Farnell, maker of the Raspberry Pi micro-computer, last month withdrew a recommendation for the Daetwyler cash offer of 165p per share after Avnet’s bid of 185p.

“Regarding the existing acquisition offer for Premier Farnell, Daetwyler is currently considering how to proceed in view of the higher offer submitted by Avnet, and will communicate in due course,” Daetwyler said in its interim results statement.

The company said that if the board of directors decided not to pursue the acquisition, it would incur one-off deal costs of around £3.17m to £6.33m.

It also faced one-off costs of around £27.7m to £31.64m for currency hedging and exchange rate losses, which could hit its financial result.

The company reported first-half net profit jumped 34.4 per cent to £44.77m and confirmed its outlook for the full year 2016.

Last month US electric component distributor Avnet’s offer trumped an earlier bid from Daetwyler.

Avnet said it was too early to say whether the deal will involve job losses at the Leeds-based electronics distributor, which employs 1,075 people in the city.

The American firm said that Premier’s management team was a key part of the attractiveness of the deal and it intends to enter into discussions with senior management about staying on at the combined group.

Premier Farnell, which was demoted from the FTSE 250 index last September, reported a 2.8 per cent increase in sales to £247m in the three months to May 1.

However, much of this was due to the success of the Raspberry Pi mini-computer.

Earlier this year the group launched the latest version of Raspberry Pi, which has built-in WiFi and Bluetooth.