View from City Road: Strange secrets at Portals

Another victim of the stock market slump seems to have been De La Rue's plans to get together with Portals. Security printing is a secretive business so it is perhaps unsurprising that the two would provide no reasons for their failure to agree terms.

Since De La Rue remains convinced of the logic of buying one of its most important suppliers, we can take it that price was the main problem. De La Rue's approach was badly timed. Portals' shares have risen sharply this year; by the time a takeover approach was confirmed two weeks ago, they stood 45 per cent higher than a year earlier. Perhaps more importantly, the stock market has been dropping like a stone.

Portals has a good profits record. To have won the backing of the Portals board, De La Rue would have needed to offer more than pounds 9 a share, perhaps pounds 10 - representing a very frothy multiple of 29 times historic earnings. Hardly a bargain for De La Rue's shareholders, who may have been asked to help to finance the deal.

De La Rue assures us that it was not put off by Laverstoke House, the magnificent Hampshire estate owned by Portals but rented to its chairman, Julian Sheffield.

This may be the abiding memory of this affair. Portals refused yesterday to say whether the benefit that Mr Sheffield derives from Laverstoke House is covered by the pounds 124,000 that its report gave as his remuneration last year. It stuck to the mealy-mouthed formula that its auditors were confident that its disclosure met statutory requirements.

What is Portals trying to hide? Are there any other perks its 'statutory disclosure' is obscuring? If none, why is it so shy? Its reported record suggests that it has little to be afraid of. One can be too secretive.