Business Weekly - Cambridge, UK

Undeterred by the possibility of a referral to the Competition Commission, Linx’s U-turn is complete and the board has recommended the £85.7m offer from Washington, DC based Danaher to shareholders, having rejected its initial approaches.

In its latest statement on the two competing bids, Linx said: “The board notes the announcement made by ITW in relation to its statement that it does not intend proceeding with the offer it announced on Tuesday 5 October 2004.

“The board has considered its position and advises shareholders that it will now be recommending the proposed 550p cash offer announced by Danaher Corporation on Wednesday 6 October 2004.”

Illinois Tool Works Inc (ITW) said: “In light of the significantly higher proposed offer announced, ITW does not intend proceeding with its offer.”

However, it has refused to entirely close the door on Linx and added: “ITW will reconsider its position in the event of new material information being made available to it or if the proposed offer by Danaher Corporation for Linx is not made, lapses or is withdrawn, including in the event that it is referred to the Competition Commission.”

Danaher originally took its bid directly to shareholders, having cited the non-cooperative stance the Linx board had originally taken when it attempted to table an alternative bid to ITW’s.

Danaher, who previously bought Videojet and Willett, said: “We see Linx as an important extension of its product identification business, which represents a $600m growth platform. Danaher believes that the combination of its existing business with Linx would represent another significant step towards building one of the world’s leading groups of businesses dedicated to providing product identification solutions.

“Danaher believes it can assist Linx through its established distribution channels, access to the Danaher Business System and capital to continue to grow the Linx business. We are confident that Linx’s employees would benefit from the additional career prospects as part of a larger, multinational organisation.”

Linx’s laser and inkjet printing technologies are used to date and batch code product packaging. It employs 730 people in six countries.

For the year ended June 30, Linx reported operating profits of £5.8m on turnover of £52.1m. It had net assets of £22.2m and a cash pile of £2.6m.