Telent presses Polygon

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August 2: The most interesting story by far today, if not exactly the largest, is Telent’s last-ditch attempt to crowbar its 24 per cent shareholder, Polygon, into backing its £346m takeover by Fortress Investment, a private equity firm. Telent is the rump of the Marconi empire. Polygon, an activist hedge fund, has its eye on Telent’s pension fund and nearly £500m held against it in an escrow account. Polygon can block the Fortress deal at the EGM on Friday but Telent issued a blunt statement today saying it was going to press ahead with the vote anyway, with the clear implication that if the deal fails the share price will fall and Polygon’s own investors will suffer. Telent’s management, led by John Devaney and Mike Parton, puts a robust case for why the Fortress deal is fair and why Polygon is wrong to think it could recover some of the funds held in escrow.

All three parties have discussed the possibility of Fortress and Polygon joining forces but this has “not resulted in any feasible proposal”, Telent says. Did the Takeover Panel decide one shareholder should not get special treatment, in order to prevent other activist investors from muscling in on deals in the future? If so, this is very significant.

We have more results from big companies today to squeeze into our reduced summer space. They include Lloyds TSB, where profits grew less in the first half than for some of its rivals in part because of higher bad debt charges. Cadbury Schweppes published strong interims and said the recent salmonella contamination of its chocolate products in the UK would cost it £20m over the year, less than feared. Read about this particular strain (Salmonella Montevideo, which as one blogger says, sounds like a Brazilian striker) on the Health Protection Agency website and, if that isn’t enough, try the salmonella blog.

Other results today: Xstrata, Alfred McAlpine, Cookson, Bellway, BOC (last figures before the Linde takeover) and Hanson.

Stand by for news later on Eurotunnel. The Paris commercial court will decide (from 2.30pm Paris time) whether to grant it protection from its creditors. The company and the two creditor groups have held more talks this morning.

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