Paint-maker hires banker after Allco bid for Wattyl

South Africa's Barloworld has appointed ANZ Investment Bank to review its options in Australia following an investment firm's A$275 million ($295 million) bid for paint-making rival Wattyl.

Allco Equity Partners has offered A$3.25 cash per share for Wattyl, which competes in the Australian market against the Dulux and British Paints brands owned by Orica and the Taubmans and Bristol brands owned by Barloworld.

"We are quite a significant player in the local industry, and clearly if there is something on the go with one of the players in the industry, we need to look at ourselves as well in light of that," Barloworld Coatings Australia managing director Garth Smart said.

Barloworld said that ANZ Investment Bank would review the terms of the Allco offer and advise it on a range of alternatives. It expected to finish its review in early February.

Barloworld's Smart declined to say if the company was considering a bid, which some analysts have said may be unlikely due to competition concerns.

He said he did not know if the Australian Competition and Consumer Commission would block a takeover.

"We have no idea and clearly that is something, that if anything was to happen, we would have to investigate. Certainly, at the moment it is not something we are even thinking about," Smart said.

In 1996, the commission blocked a takeover bid by Wattyl for Taubmans, then owned by Britain's Courtaulds.

Macquarie Bank and Johnson, Winter & Slattery are advising Allco.

Wattyl shares closed up 0.9 per cent A$3.36, while Allco's shares closed down 1.3 per cent at A$3.03 in a stronger overall market.

- REUTERS