McAlpine tight-lipped as Raine reveals bid talks

Alfred McAlpine's takeover bid for Raine Industries was unveiled this week. The move follows discussions over several weeks since Easter.

Raine first announced that it was in talks with an unnamed bidder last week, then, at 7.30am on Monday morning this week the Stock Exchange was told that Alfred McAlpine was the acquisitive party.

A source in the housebuilding industry told CJ: "Raine had been talking to McAlpine since Easter. During that time Raine's new md has gone through the company with hobnail boots, kicking backsides: since Easter, it's gone from being a friendly firm to one with a vicious atmosphere.

"Hassell Homes is the only profitable bit of Raine - if it didn't have Hassell it would have been bankrupt five years ago. But Hassell is so understaffed right now that employees' lieu-days off have been cancelled during the last fortnight, as workers were called in for work."

Roy Barber, Raine chairman, was tight-lipped when asked for details of developments, while Oliver Whitehead, McAlpine's chief executive was "manacled by his finance advisers and told not to comment at all", according to a company spokesman.

The spokesman added: "It is unfortunate that Raine had to put out a statement. McAlpine is in discussions which may lead to an all-share offer."

Finding a buyer has always been Barber's end game, according to one construction analyst. He said: "Barber had successfully done various doctor jobs before he arrived at Raine. He has spent a year or two sorting Raine out: the finances are sounder and it is a better operation.

"It is probably that Barber has hung 'for sale' signs in front of a select number of potential bidders. I don't see this as a sale forced by the banks."

Raine made a profit before tax last year of œ570,000 after running up a œ102 million loss in 1995, and in the latest six-month period to December 1996, Raine's pre-tax profit rose to œ1 million.

Raine's deferred tax amounts to œ8 million. A company spokeswoman dismissed suggestions that the figure, which can be "acquired" by a bidder and knocked off the sale price, ran to more than œ100 million.

Both Beazer and Gleeson are seen by some as potential "white knights" should McAlpine's bid fail.

A spokeswoman for Beazer said: "Raine is a contractor's call. Raine has been courting McAlpine for a long time".

The head of another pure housebuilder in the top 10 agreed. He said: "Raine has a large contracting business and it would be very difficult for us, as a pure housebuilder," he said, "to get rid of it as construction is a lousy business. We did look at Raine but even the housebuilding business was not particularly attractive."

Gleeson chief executive Dermot Gleeson said: "We are not looking at Raine. We've got enough on".