Activist hails ‘great price’ as De La Rue agrees £300m sale

Shares in De La Rue, the embattled banknote printer, rose sharply after it struck a conditional deal to sell its authentication division for £300 million.
The proceeds will be used to pay down group debt and channel money into the company’s deficit-plagued staff pension scheme.
De La Rue disclosed that an earlier version of the deal had raised concerns with The Pensions Regulator and had to be adjusted.
The division, which supplies security devices such as holograms to authenticate goods and documents, is being sold to Crane NXT, the New York-listed industrial technology firm.
The disposal leaves De La Rue as a pure banknote printer. It now has the option to seek a buyer for the banknote division, seek a bid for the whole group or carry on independently.
De La Rue, which is based in Basingstoke, was founded more than 200 years ago. It was once a substantial blue chip company and member of the FTSE 100 but has repeatedly stumbled and today is valued at just over £200 million.
Setbacks have ranged from losing the contract to print British passports to corruption allegations and quality problems.
Last year it was forced to suspend deficit payments to its legacy defined benefit pension fund and the corporate troubleshooter Clive Whiley was hired as chairman to impose radical reform.
It still prints notes for the Bank of England and the Scottish banks and recently began producing notes with King Charles’s face on them.
Whiley hailed the deal as “a substantial step forward”. It would allow the company to repay its revolving credit facility in full ahead of maturity on July 1, 2025, he said on Tuesday, and help deliver a long-term funding solution to the pension fund.
Richard Bernstein at Crystal Amber, the activist investment group with a stake of more than 15 per cent, also welcomed the deal, calling it “a great price”. Bernstein has been agitating for change at De La Rue and was a major force in kicking out the old chairman Kevin Loosemore last year.
“Had we not managed to change the chairman 18 months ago, this [De La Rue] would have gone into administration on 30 June 2023. Clive Whiley has delivered,” he said
De La Rue said it would pay £30 million of the sale proceeds into the pension scheme on deal completion and another £12.5 million in the period up to April 2027. One long-term option would be to hand the scheme assets and liabilities to an insurer through a so-called buyout.
Around 6,500 current and former employees of De La Rue are owed pensions worth £696 million, while the shortfall in the scheme was put at £78 million at the last actuarial valuation in September 2023.
Clive Vacher, De La Rue chief executive, said the regulator had intervened in an earlier version of the deal to ask for scheme members to be treated more equitably as against the banks.
Under the new deal De La Rue will still be able to pay off its revolving credit facility in full by the time it expires in July 2025. Vacher said the aim was now to close the pension deficit in three years, rather than the six years previously envisaged.
The shares rallied by 13½p, or 14.4 per cent, to close at 107½p. They were languishing as low as 30p last June amid fears the company would fail.
The deal was structured as a “put and call option agreement” for tax reasons, Vacher said, and is conditional on clearance from the competition authorities and the full separation of the division from the rest of De La Rue. The division posted revenue of £102.9 million in the year to 30 March 2024, up 16.9 per cent, with operating profits of £14.6 million, up 3 per cent.