Melrose to mount raid for Novar

THE City is preparing for a hostile bid battle as Melrose pounces on Novar, the printing, metals and building conglomerate.

If successful, Melrose directors including Institute of Directors director-general Miles Templeman could share a multi-million pound profit.

Melrose, a cash shell set up by former Hanson executive Chris 'Jock' Miller, is set to table a £650m bid for Novar at the end of the week.

Shareholders will be offered cash and shares equivalent to between 140p and 150p a share. Novar rose 20 1/4p last week to close at 139 1/4p.

Novar has begun shoring up its defences and last week it accelerated the appointment of former Cookson boss Stephen Howard as chief executive.

Directors of Alternative Investment Market-quoted Melrose have 'incentive' shares that will give them a payout of 10% of any increase in Novar's value three years after a successful bid.

'This business has stood still for five years and we think if we can double the value for shareholders they will be happy to see Melrose well rewarded,' said a spokesman. 'If we don't deliver value we get nothing.'