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Honeywell to buy U.K.'s Novar for $1.7 billion

/ Source: The Associated Press

Honeywell International Inc., the aerospace and high-tech manufacturer, is offering about 900 million pounds ($1.7 billion) to buy British industrial holding company Novar PLC and Novar’s board is backing the offer, the two companies said Monday.

The British-based company has interests in electronics, aluminum extrusion and printing checkbooks.

The Honeywell cash bid values each Novar ordinary share at 1.85 pounds ($3.54), or a total of 798 million pounds ($1.5 billion) the companies said.

That represents a premium of about 49 percent to the closing middle market price of Novar ordinary shares on Nov. 3, just before Melrose PLC, a small investment firm, announced a possible offer for Novar.

Novar directors recommended that shareholders reject the Melrose bid, which offers one Melrose ordinary share and 45 pence (86 cents) for each Novar ordinary share.

Honeywell is also offering 103.625 pence ($1.98) in cash for each Novar preference share, or a total of 131 million pounds ($250 million).

Honeywell, based in Morris Township, N.J., also will assume about 300 million pounds ($580 million) of outstanding Novar debt in the deal.

Holders of Novar ordinary shares will be entitled to retain a final 2004 dividend of 6.6 pence (12.6 cents) per share. That is in addition to the cash being offered for the ordinary shares, said Robin Walker, a spokesman for the Finsbury Group, the public relations company that represents Novar.