Bob's £157m Thomas bid falters

BOB the Builder's £157m proposal to Thomas the Tank Engine's owner, Gullane Entertainment, could be derailed as Gullane warned that profits will not meet market expectations.

Bob's owner, Hit Entertainment, which made a 500p-ashare takeover offer this week, was today digesting the new information and assessing the impact on its bid.

Gullane's shares dropped 20p to 452 1/2p as it said delays in major contracts meant profits will not be higher than last year's £9.2m. The market had been looking for £11.7m.

Most of the problems centre on Guinness World Records, the annual catalogue of feats and superlatives that Gullane bought from Diageo last year for £46m.

Various GWR licensing agreements that Gullane hoped to pull off have been delayed, while the drop in sales of the book in one of its crucial markets, the United States, is worse than anticipated.

Although there has been a 23% fall in the children's book market, the new owner of GWR believed at the time of the interim profit announcement in March that the Guinness Book would not be as badly affected. However, the high level of returns of unsold books since then tells a different story.

Gullane said overall revenue from its other businesses was in line with expectations and added that today's unexpected statement was due to the bid.