Tandem

Bicycle and leisure products developer Tandem has made a £4.3m share-based offer for fellow Aim-listed rival MV Sports, a significant premium to MV's £2.8m market cap. Tandem, which owns snooker brand Pot Black and golf equipment supplier Ben Sayers, as well as various bike businesses, is offering two of its shares for every 43 MV shares and has already received the blessing of its target's board. According to Tandem finance director Mervyn Keane, there are several significant advantages a tie-up between the two would bring including greater buying power, reduced costs and an enhanced customer base. Keane also believes that MV's sourcing office in Hong Kong will be a big asset to Tandem in the future. Should the bid prove to be successful, however, Tandem looks almost certain to dispose of profitable bottled water distribution business Water Waiter. Though Keane says no decision has been taken, he admits that that it 'obviously doesn't fit' with the company's current activities. News of the bid for MV coincided with a warning that profits before goodwill for the year to January 2003 will not exceed £440,000, a significant fall against the £715,000 profit achieved 12 months ago, following problems at the lower end of the bike market.

Sector: Personal Goods

Companies: Tandem

Market cap: £8.45m

PE Forecast: n/a

Share price: 3.25p

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