Bunzl in acquisition talks

LONDON (Reuters) - Distribution and outsourcing group Bunzl (BNZL.L) said on Monday it had traded in line with its expectations in its third quarter and was in talks with possible acquisition targets. The firm said revenue increased 8 percent in the three months to end-Sept, boosted by favourable foreign exchange movements.

Although underlying revenue fell 1 percent, that was a slight improvement on growth in the first half, mainly due to a better performance in continental Europe.

Bunzl's profit margins also improved, reflecting cost reduction initiatives and foreign exchange benefits.

"While acquisitions remain a key component of Bunzl's strategy and discussions continue with a number of potential targets, the difference in the company's price expectations and those of prospective sellers continues to be an impediment to finalising transactions," it added.

Shares in Bunzl, which have increased in value by about 18 percent over the last three months, closed Friday at 636 pence, valuing the business at about 2.09 billion pounds.

(Reporting by James Davey; editing by Kate Holton)