Dawn raid puts Blenheim ahead

The roller-coaster ride at bid target Blenheim took a dramatic turn yesterday, when VNU, the Dutch publishing giant, mounted a dawn raid to scoop up 15 per cent of the exhibitions group at 500p a share. The shares raced ahead 28.5p to close at 464p.

Blenheim issued a statement to the Stock Exchange, saying that it would continue to talk to all parties and that an announcement would be made "at the earliest opportunity". The statement fuelled speculation that bid talks continued with both Reed Elsevier and United News & Media, the two original suitors for Blenheim.

The dawn raid, which took the market and other potential bidders by surprise, gives the Dutch company a platform to mount a full bid in the future, a prospect it did not rule out yesterday.

For now, however, VNU said it viewed the investment as a strategic one. A spokesman denied the move was a spoiling tactic to lock out other bidders for Blenheim.

The exhibitions company has been in the takeover limelight since early summer, when it emerged that United News & Media, which has amassed a 2 per cent holding in Blenheim, had made an approach pitched at about 450p a share. But the bid faded away following tensions with Blenheim management over the amount of financial information it would be allowed to review.

Reed, the other leading bidder, had believed early this week that it was on track toward an agreed bid pitched at 480p a share. Analysts said that confirmation of Reed's bidding intentions, published in The Independent on Monday, had helped convince VNU to make its pre-emptive move.

The 500p a share offer has effectively created a new floor for an eventual bid for Blenheim, analysts said yesterday. They added, however, that the 15 per cent stake taken by VNU was difficult to understand, unless the company was planning to make a full bid soon. One analyst commented: "Certainly this gives them a place at the table, but at what price?"

Other analysts speculated that the move was designed to ensure VNU could negotitate for bits of Blenheim should some of its exhibitions assets be sold off separately following a bid.

Reed had no comment yesterday. But it is understood the company and its advisers had been wrong-footed by the VNU move, and spent yesterday reviewing their options.

It is thought VNU had first approached Blenheim in late summer, but had not held any substantive talks about a takeover. Insiders at the exhibitions company said yesterday that at least one other potential bidder, based in the US, was in the wings.

VNU publishes magazines in Europe and the US, with an emphasis on the computer and consumer end of the market. It has a very limited number of exhibition operations in the US and Europe.

The company said it was seeking ways of developing the synergies between publishing and exhibitions, a combination that has proved lucrative for Reed Elsevier and United.