Radius MBO under threat from rival bid

Takeover Oxfordshire-based Torex sets sights on sixth acquisition.

The prospects for struggling systems integrator Radius have darkened with the revelation of a hostile bid from rival company Torex to challenge the faltering management buyout (MBO).

The #15.4 million offer made by Sudiar, the MBO vehicle company (PC Dealer, 22 July), was topped by the Torex share offer, worth approximately #20 million.

The bid received on 3 August from Oxfordshire-based Torex will be considered by two independent directors.

The Sudiar MBO achieved only 37.4 per cent acceptance from the shareholders on 6 August, although the offer has now been extended to 20 August.

The bid marked the latest chapter in Torex' continuing acquisition spree, which stands at five, the last being Swindon-based Quota Computer Associates in July.

Mark Pearman, financial director of Torex, said: 'We will be posting out our offer to Radius shareholders by end of this week, so it hasn't been recommended by the independent directors yet. We have to wait and see.'

He added the retail and maintenance parts of the group were particularly attractive to Torex.

Hull-based Radius believed it had found its saviour with an MBO, led by chief executive Phil Kelly and finance director Lawrence Bland, backed by venture capitalists Alchemy Partners.

The cash offer of 55p pushed the shares from a low of 26.5p to 52.5p at the beginning of August. However, the rival bid pushed the shares further to a high of 62.5p last week.

Radius' profits have steadily fallen over the past three years. For the year ended December 1996, it reported #1.59 million, crashing to #1.12 million for December 1997.