De La Rue suitors take note: UK shareholders don't always roll over

Oberthur sounded bitter. "Shareholders in De Le Rue may now ask themselves how long it will be before the market price of De La Rue shares attains the level of the increased proposal," the French group said as it withdrew from battle after seeing its latest 935p-a-share offer, or £925m, rejected by the banknote printer's board. Well, OK, the wait could indeed turn out to be long. There is no guarantee that De La Rue will be successful in its attempt to retain its biggest customer, the Reserve Bank of India. Tim Cobbold, its new chief executive, faces big challenges in attempting to shake up a seemingly complacent organisation. But are those reasons to jump at 935p? Should De La Rue shareholders have risen in rebellion against their board, as Oberthur evidently wishes they had? Of course not. De La Rue has suffered an enormous and embarrassing cock-up in dispatching faulty banknotes to India but the episode does not appear to be life-threatening. There is still hope of a full, or fullish, recovery. Sorry, messieurs, but this was not a moment to sell well-invested assets to the first opportunistic bidder. Yes, the path to 935p may look daunting from 695p ('s closing price) but 34% is certainly not impossible in two years, a common horizon to use when assessing takeover offers. The bottom line is that Oberthur wasn't offering enough: £10 a share always seemed the minimum to have a sniff of success. The French– who were advised by Lazard, the bank that led Kraft's successful assault on Cadbury – may have believed that UK fund managers are spineless, short-sighted individuals who would accept any takeover offer that delivers a beneficial kick to their next quarterly performance statistics. It would be an understandable mistake to make. Happily, on this occasion, the shareholders discovered their backbones.