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  • BY: Andrew Hore |
  • POSTED: 29/12/2011 |

Bus maker Alexander Dennis Ltd has decided not to bid for Aim-quoted rival Optare after Ashok Leyland said that it was not willing to sell its 26% stake.

Even if Alexander Dennis had acquired the rest of the shares it would have been limited in what it could do with the company because it would own less than 75% of Optare.

Optare holds its general meeting to approve the refinancing and restructuring on 6 January. Optare plans to raise 4m through a placing at 0.27p a share and that will give the Indian commercial vehicle manufacturer Ashok Leyland and associated companies 75.1%. Ashok, which is part of the Hinduja Group, will also provide a borrowing facility of up to 12m as part of the plan. A temporary facility of 1.5m has been provided on top of existing borrowings. It is repayable on 30 days notice.

The Optare share price has dropped 0.075p to 0.53p, which values the bus manufacturer at 3.95m, but it is still slightly above the closing price before the potential bid was mentioned.

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