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October 24, 1988


By CBR Staff Writer

Sir Charles Ball, chairman of Telephone Rentals Plc, yesterday mounted a stiff defence to what he described as Cable & Wireless Plc’s wholly-inadequate offer for the company. Cables wants the main player in the UK PABX marketing business as a direct extension to its Mercury Communications business. However Sir Charles claimed Cables was trying to acquire Telephone on the cheap, and the stock market would seem to agree, valuing it at 343 pence yesterday afternoon, 38 pence above the offer price. Speaking on the occasion of the company’s half year results pre-tax profits up 17.1% at UKP11.0m – he told shareholders that the all-cash offer, valuing the company at UKP284m, did not reflect the exceptional value of Telephone Rentals’ unique position in the market. He went went on to describe Rentals as the only significant independent British company dedicated to the supply and maintenance of business communications, and said that management had transformed its business in the five years since the liberalisation of the UK telecommunications market. He finished with a flourish claiming Cable & Wireless may indeed have a pressing need to acquire Telephone Rentals, but Telephone Rentals most certainly does not need Cable & Wireless. Telephone reported record orders in the first six months of 1988; new rental business was 40% up on 1987, while sales were 53% up over the same period. However overseas profits fell, mainly due to a UKP707,000 loss in Canada, compared with a break-even position last time, with South Africa, Ireland, USA, Australia and France all contributing to profits. Sound Systems Plc of Ireland was acquired at the end of July, and cellular telephone supplier The Carphone Group was acquired last month.

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