De La Rue's final deal looks surprisingly positive
LONDON, April 15 (Reuters Breakingviews) - De La Rue's (DLAR.L), opens new tab rocky road on the public market may end on an unexpected high. On Tuesday, the UK banknote printer said, opens new tab it had accepted a 263-million-pound ($348 million) offer from U.S. private equity group Atlas. For a company that has spent years breaking itself up while battling seemingly terminal decline, it's a reasonable outcome.
De La Rue has been around for over 200 years. In its earlier life, the company expanded across the globe and ended up winning contracts from clients as diverse as the Bank of England and far-flung money-printing authorities in Mauritius and Kuwait. But the decline of cash in recent decades, and the loss of a contract for printing British passports in 2018, have caused financial pain and plenty of profit warnings.
In 2022 the company had a public fight with its auditor EY over a warning in its accounts that the company may struggle to survive as a going concern. Then in 2023 the group requested to defer payments intended for its pension scheme and activist shareholder Crystal Amber Fund called for a new chair and business plan. The shares then traded at a fraction of their current value.
Enter Clive Whiley in 2023. Since his appointment to lead the board, De Le Rue's shares have increased nearly fourfold thanks to a focus on cutting costs. The group is also in the process of selling its authentication business, which helps governments detect fraud, to U.S. industrial technology company Crane NXT (CXT.N), opens new tab.
Buyout group Atlas is effectively taking over the remaining banknote business, the last vestige of a once-sprawling empire. The rise of digital money might, in one sense, make that seem like a dicey bet. In 2023, opens new tab in the United Kingdom, opens new tab, for example, only one in five transactions were made in cash, according to the British Retail Consortium.
Yet Atlas may have its eye on the classic private-equity playbook of boosting cash flows by taking an even greater axe to costs. There appears to be some scope to boost profitability. Ten years ago, the business operated with an EBITDA margin of nearly 20%, which has since declined to under 13%.
And the authentication-division sale will bring in 300 million pounds next month, which implies net cash for De La Rue of about 100 million pounds, according to a person familiar with the business, giving Atlas plenty to play with. For a centuries-old company, there seems to be a surprisingly large amount of value left to extract.
Follow @aimeedonnellan, opens new tab on X
U.S. private equity firm Atlas on April 15 said it had agreed to buy British banknote printer De La Rue for 263 million pounds.
The 130 pence per share all-cash deal implies a 16% offer premium to De La Rue's closing price on April 14.
Shares in De La Rue were up almost 16% to 129.54 pence as of 1053 GMT on April 15.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
2 hours ago
- Telegraph
The treaty Gibraltar wants, for the future we all need
For over five years, Gibraltar has been at the centre of one of the most complex, technical, and geopolitically sensitive negotiations undertaken by the United Kingdom and the European Union since Brexit. The process has consumed me. It has occupied close to half of my time in elected office, taken over almost every waking hour of the last five years, and, in truth, deprived the people of Gibraltar of their Chief Minister in the way they are used to having him, that is, from fixing housing and parking complaints to defending their sovereignty in the international arena. For much longer than I would have wanted, I have been behind closed doors, in physical or virtual boardrooms, working through the details of a document that will shape the next generation of our people. It has been a relentless, exhausting endeavour. Throughout this time, the UK and Gibraltar teams have worked together seamlessly, 'hand in glove', without a flash of daylight between us. We have worked in close partnership with both Conservative and Labour prime ministers and foreign secretaries; from Dominic Raab, Liz Truss and James Cleverly to David Cameron and now David Lammy. What we have negotiated is not the product of fragmented agendas, but the position of a unified British family determined to find a solution worthy of our people. Without a treaty, Gibraltar could be staring down the barrel of a hard border, marked by endless queues, disrupted supply chains, and a deeply uncertain future for many of our businesses. Our hospitals and elderly care homes would face chronic understaffing, and the surrounding region would suffer the almost certain loss of employment for many of the 15,000 cross-border workers who depend on Gibraltar's economy to support their families. The services we deliver to our people would all come under strain. Our public finances would be pushed to the brink. The self-governing Gibraltar we have built would be diminished, replaced by something poorer, more isolated, more inward-looking, and ultimately less able to thrive as a proud, British European Territory. Instead, we now stand at the threshold of something remarkable, and not just for Gibraltar, but also for the United Kingdom, for Spain, and for Europe and our people. Something bold. Something forward looking and hopeful. Something that finally breaks free of the negative inertia that has defined too much of our recent past. Unlocking potential across borders This is politics at its most elevated. The service-led principle of working for our people's benefit and not the performative personal antagonism that too often infects public life. Real, hard graft that overcomes challenges to deliver progress. This is the kind of result our people demand when they voice distrust and decry the political 'establishment'. Our Spanish and EU counterparts, for their part, have brought to the table a seriousness of purpose that also reflects the gravity of the moment. They, too, have recognised that this treaty is not merely about fluidity of movement, but about unlocking human and economic potential across borders. Make no mistake: the treaty that is now within reach is not one that the Gibraltarians have been forced to accept. Our people voted for us to have a mandate to turn our New Year's Eve agreement of 2020 into a UK/EU agreement/treaty. So we say 'yes' to this agreement, but not because we don't know how to say 'no' when we have to. We did so, emphatically, in 2002, when we triggered a referendum to reject Jack Straw's proposal of joint sovereignty with Spain, and I am just as adamant today that this treaty will not in any way compromise British sovereignty over Gibraltar. That will be set out, black upon white, in the treaty when it is published. It is a legal undertaking given by both sides in clear and unequivocal terms. So to be clear: in this treaty we have not ceded any control of Gibraltar to any authority. Just like today, only Gibraltar will decide who enters Gibraltar – exactly as we agreed in 2020 when Dominic Raab was foreign secretary and Boris Johnson was prime minister. This treaty unleashes the potential to usher in a new era. One in which we move beyond the tired narratives of the past on constant sovereignty disputes, towards a future defined by hope, cooperation and shared prosperity. It will pave the way for better jobs, more investment and lasting stability for Gibraltar and the wider region. It can deliver more harmonious human relations and a better quality of life for all our people. When you read it, I ask that you to look up from the pages of this treaty and see that better reality as it peers back at us from the future. This will be the treaty Gibraltar wants. It will be a treaty the UK and the EU can be proud of. And it will be a treaty that will propel us all to the better future politicians are elected to deliver. When the time comes, back Gibraltar and its proudly British people by backing the Gibraltar treaty.
Rhyl Journal
2 hours ago
- Rhyl Journal
UK agrees to check-free land border for Gibraltar but EU controls for flights
The agreement on a 'fluid border' clears the way to finalise a post-Brexit deal on the territory with the EU. But those flying into Gibraltar from the UK will face one check from Gibraltarian officials and another by the Spanish on behalf of the EU. An agreement for the future relationship between the EU and the UK in relation to Gibraltar is now a reality. It is a historic agreement. — Fabian Picardo (@FabianPicardo) June 11, 2025 This is because the land border will allow those arriving by air access to the European Schengen free travel area unchecked once they are in Gibraltar. The UK and Gibraltar insisted the changes would not affect the British overseas territory's sovereignty. The airport will operate under a model similar to London's St Pancras station, where passengers pass through both UK and French passport checks to board international trains. Goods and customs checks will also eventually be removed in both directions under the agreement. The move could also see airlines start to add flights to Gibraltar from countries other than the UK in a boost to tourism. Officials say a hard border would have been introduced under the EU's incoming exit and entry control system if no deal was reached, causing delays for some 15,000 people who cross the border every day as every individual passport was checked. Talks on rules governing the border have been ongoing since Britain left the European Union in 2020. Foreign Secretary David Lammy said the previous Tory government left behind a situation that 'put Gibraltar's economy and way of life under threat'. He said the agreement was a 'breakthrough' after years of uncertainty. He said: 'Alongside the government of Gibraltar, we have reached an agreement which protects British sovereignty, supports Gibraltar's economy and allows businesses to plan for the long-term once again. 'I thank the chief minister and his government for their tireless dedication throughout the negotiations. The UK's commitment to Gibraltar remains as solid as The Rock itself.' Spanish foreign minister Jose Albares said the deal marked 'a new beginning' in the relationship between the UK and Spain. He said that Spain 'will guarantee free movement of people and goods', adding that Gibraltar would now be linked to the Schengen Area with Spanish authorities controlling entry and exit. I have always said nothing about Gibraltar, without Gibraltar. — David Lammy (@DavidLammy) June 11, 2025 President of the EU Commission Ursula von der Leyen welcomed the deal. In a post on X, she said: 'It safeguards the integrity of Schengen and the single market, while ensuring stability, legal certainty and prosperity for the region.' Gibraltar's chief minister Fabian Picardo said the deal would 'protect future generations of British Gibraltarians and does not in any way affect our British sovereignty'. 'Now is the time to look beyond the arguments of the past and towards a time of renewed co-operation and understanding. Now the deal is done, it's time to finalise the treaty,' he said. On Wednesday evening, Sir Keir Starmer spoke with Mr Picardo and thanked him for 'his years of hard work, commitment, and leadership to reach an agreement'. Spanish Prime Minister Pedro Sanchez also had a phone call with Sir Keir, and congratulated the British PM because 'his Government had succeeded where others had failed'. The Conservatives have said they will carefully review the UK's agreement with the EU on Gibraltar's border to see if it crosses any 'red lines' the party set out during its own negotiations when in government. Shadow foreign secretary Priti Patel said: 'Gibraltar is British, and given Labour's record of surrendering our territory and paying for the privilege, we will be reviewing carefully all the details of any agreement that is reached.' Mr Lammy held talks with Gibraltar's leaders, members of the opposition and the business community before leaving the British overseas territory to head to Brussels on Wednesday morning. Gibraltar was ceded to the UK by Spain in 1713 and the population is heavily in favour of remaining a British overseas territory. The last time it voted on a proposal to share sovereignty with Spain, in 2002, almost 99% of Gibraltarians rejected the move. Gibraltar also hosts an RAF base at its airport and an important naval facility.
North Wales Chronicle
3 hours ago
- North Wales Chronicle
UK agrees to check-free land border for Gibraltar but EU controls for flights
The agreement on a 'fluid border' clears the way to finalise a post-Brexit deal on the territory with the EU. But those flying into Gibraltar from the UK will face one check from Gibraltarian officials and another by the Spanish on behalf of the EU. An agreement for the future relationship between the EU and the UK in relation to Gibraltar is now a reality. It is a historic agreement. — Fabian Picardo (@FabianPicardo) June 11, 2025 This is because the land border will allow those arriving by air access to the European Schengen free travel area unchecked once they are in Gibraltar. The UK and Gibraltar insisted the changes would not affect the British overseas territory's sovereignty. The airport will operate under a model similar to London's St Pancras station, where passengers pass through both UK and French passport checks to board international trains. Goods and customs checks will also eventually be removed in both directions under the agreement. The move could also see airlines start to add flights to Gibraltar from countries other than the UK in a boost to tourism. Officials say a hard border would have been introduced under the EU's incoming exit and entry control system if no deal was reached, causing delays for some 15,000 people who cross the border every day as every individual passport was checked. Talks on rules governing the border have been ongoing since Britain left the European Union in 2020. Foreign Secretary David Lammy said the previous Tory government left behind a situation that 'put Gibraltar's economy and way of life under threat'. He said the agreement was a 'breakthrough' after years of uncertainty. He said: 'Alongside the government of Gibraltar, we have reached an agreement which protects British sovereignty, supports Gibraltar's economy and allows businesses to plan for the long-term once again. 'I thank the chief minister and his government for their tireless dedication throughout the negotiations. The UK's commitment to Gibraltar remains as solid as The Rock itself.' Spanish foreign minister Jose Albares said the deal marked 'a new beginning' in the relationship between the UK and Spain. He said that Spain 'will guarantee free movement of people and goods', adding that Gibraltar would now be linked to the Schengen Area with Spanish authorities controlling entry and exit. I have always said nothing about Gibraltar, without Gibraltar. — David Lammy (@DavidLammy) June 11, 2025 President of the EU Commission Ursula von der Leyen welcomed the deal. In a post on X, she said: 'It safeguards the integrity of Schengen and the single market, while ensuring stability, legal certainty and prosperity for the region.' Gibraltar's chief minister Fabian Picardo said the deal would 'protect future generations of British Gibraltarians and does not in any way affect our British sovereignty'. 'Now is the time to look beyond the arguments of the past and towards a time of renewed co-operation and understanding. Now the deal is done, it's time to finalise the treaty,' he said. On Wednesday evening, Sir Keir Starmer spoke with Mr Picardo and thanked him for 'his years of hard work, commitment, and leadership to reach an agreement'. Spanish Prime Minister Pedro Sanchez also had a phone call with Sir Keir, and congratulated the British PM because 'his Government had succeeded where others had failed'. The Conservatives have said they will carefully review the UK's agreement with the EU on Gibraltar's border to see if it crosses any 'red lines' the party set out during its own negotiations when in government. Shadow foreign secretary Priti Patel said: 'Gibraltar is British, and given Labour's record of surrendering our territory and paying for the privilege, we will be reviewing carefully all the details of any agreement that is reached.' Mr Lammy held talks with Gibraltar's leaders, members of the opposition and the business community before leaving the British overseas territory to head to Brussels on Wednesday morning. Gibraltar was ceded to the UK by Spain in 1713 and the population is heavily in favour of remaining a British overseas territory. The last time it voted on a proposal to share sovereignty with Spain, in 2002, almost 99% of Gibraltarians rejected the move. Gibraltar also hosts an RAF base at its airport and an important naval facility.
