The Guinness Peat Group has pulled out of takeover talks with Scottish cashmere company, Dawson International. And today the Perthshire-based yarn-to-cashmere company, whose Ballantyne and Barrie brands are worn by celebrities all over the world, said it was business as usual.

Investment company, the Guinness Peat Group (GPG), which has a 21.3 per cent stake in Dawson, had been in discussions with the company since October. But a statement issued by both parties today said the two companies had mutually agreed to end the discussions because of the "continuing uncertainties" the talks were causing, GPG has pledged its continuing support for Dawson.

Blake Nixon, UK executive director of GPG said: "I wish to place on record that, having undertaken four months of due diligence, we remain a committed shareholder given Dawson's future prospects and in particular, our continued belief in the considerable potential to develop the Ballantyne brand.

"Further, we continue to be strongly supportive of Paul Munn and his management team."

Paul Munn, chief executive of Dawson International said: "There had been no firm proposal. We felt the process had gone on for long enough and the uncertainty was disruptive to the business."

The origins of Dawson International, which employs 1,000 people in the UK, go back to the 1870s when Joseph Dawson invented the dehairing process for cashmere.

Dawson has gone a long way since then and if preliminary results for the year due to be released in early March are anything to go by it is on the up and up.

Ian Irvine, chairman of Dawson said: "Dawson International is a recognised world leader in the sourcing, manufacture and marketing of high-quality cashmere products.

"The expected results for the year just ended demonstrate the underlying strength of the business and our proven ability to develop as an independent company."

Forecasts are that profit before tax will be £8.2m - nearly double last year's results of £4.3m.

Dawson unveiled its new Loch Leven cashmere yarn in Florence recently and will be showing off its new Ballantyne range for 2001 at London's Fashion Week later this month.

It has also announced plans to refurbish its Bond Street store in London in the autumn.

By Deborah Bowyer

For more information, read Dawson's Shares Slump After Talks Ended