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Defensive Ryland rejects GP bid as 'undervalued'

Ryland Group this week formally rejected Guinness Peat's £35.6m indicative offer as an “opportunistic bid” that “significantly undervalues” the company and its prospects.

The dealer group has been buoyed by a strong first-half performance, which it hopes will persuade shareholders to rebuff the venture capitalist's approach. Operating profits are up 25 per cent to £4.7m for the six months to June 30 on turnover down from £356.9m to £298.8m.

Ryland's defence document points out that pre-tax profits before exceptional items doubled to £3.3m, leading to the group issuing an interim dividend of 2p per share, up 18 per cent. It predicts full-year pre-tax profits of £5.7m.

“Given an indicative approach from a third party at a level above 120 pence per share has been received, shareholders who accept the offer may end up providing Guinness Peat with a quick profit at their own expense,” says Peter Whale, Ryland chairman.

He adds that bid discussions with a third party, thought to be Reg Vardy, are progressing well. A spokesman for Guinness Peat says it is reviewing the defence document.

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