Americans target British tank-maker

BRITAIN'S only tank manufacturer, Alvis, is set to fall into American hands in a £309m cash deal.

US defence and aerospace giant General Dynamics, maker of the Abrams tank, is offering a premium to buy Alvis with a bid of 280p per share, a third more than yesterday's closing price, recommended by the Alvis board headed by Nick Prest.

He and fellow board directors have pledged their collective 0.7% shareholding in favour of the offer, which comes with a loan-note alternative.

The Telford, Shropshire, company which bought Vickers Defence from Rolls-Royce 18 months ago, makes the Challenger tank, Sabre reconnaissance vehicle and most of the British army's other armoured vehicles.

Prest said: 'It is hard to penetrate the US market without a large partner and they will have a strong interest in promoting Alvis products. We see opportunities, too, of working together on major UK projects for medium and lightweight vehicles.'

General Dynamics' Art Veitch, executive vice president of combat systems, promised the takeover would not trigger Alvis job cuts. 'The expectation is that we want Alvis to continue to be run by the Alvis management team,' he said.

News of the takeover bid coincided with Alvis delivering a 20% rise in 2003 pre-tax pre-exceptional profits to £19.8m after a 54.5% increase in turnover to £348.8m.