Domino Printing-Brother Industries Deal
UK printer maker Domino sold to Japan's Brother for £1.03bn.Domino

Shares in Domino Printing Sciences soared in London trade on 11 March on news that it had agreed a near £1.03bn (€1.46bn, $1.55bn) takeover by Japan's Brother Industries.

Shares in Domino were trading 31.07% higher at 12.38pm, after the Cambridge-based firm said its shareholders will get 915 pence per share, a 27% premium to the stock's 10 March closing price.

Domino shareholders will also get the 14.76 pence-per-share final dividend announced in December. They can choose to receive loan notes issued by Brother instead of the cash offer.

Domino, which makes printers that stamp barcodes and expiry dates on beverage cans, food items, and medicines, will operate as a standalone division post the deal, according to a statement by the Japanese group.

Rothschild was Domino's financial adviser while Citi advised Brother.

Financing

The deal will help Brother Industries expand its industrial printing range.

Brother, which makes equipment ranging from printers, sewing machines and online karaoke systems, derives nearly 70% of its sales from its printing and solutions arm.

Brother said it intends to finance the deal through debt or existing cash. It has a bridge facility with Citibank and Citibank Japan under which £1.073bn will be available.

Rival bids?

UBS analyst Robbie Capp said in a note to clients that Domino's products had been leading the digital label printing market in certain areas, and that a rival bid will not be surprising.

Some analysts told Reuters that US-based firms Danaher Corp and Dover Corp could be potential bidders.

Peel Hunt analyst Henry Carver told the news agency that a US firm could table a rival bid "given how neatly Domino would fit into a US portfolio given that's where it is weaker".

Sky News reported on 10 March that Domino had agreed to a deal with a Japanese firm, adding that the British company had held talks with some US-based competitors in recent months.