Quebecor Printing's hopes of a grand transatlantic alliance with UK rivals Watmoughs were dashed after the group agreed a £250 million deal with Investcorp.

Watmoughs, which was founded in Bradford but has its headquarters in London, repelled the Canadian firm's £188 million hostile bid and said the Bahrain investment business was buying its shares at 345p each.

News of the deal came as the Department for Trade and Industry cleared the proposed acquisition of Watmoughs by its Canadian rivals.

Webinvest, which is a subsidiary of Investcorp and secured the deal, said the offer represented a premium of 75 per cent to the closing market price of Watmoughs shares on December 2 - the day before Quebecor made its approach.

Sir Derek Birkin, chairman of Watmoughs, said: "We believe that the terms of Webinvest's offers will be attractive to our shareholders. The board is recommending shareholders to accept."

Webinvest also announced that it had agreed to acquire the British Printing Company.

Richard Warner, director of Webinvest, said: "We believe that the combination of the British Printing Company and Watmoughs makes sound industrial logic, enabling us to make this attractive offer to Watmoughs shareholders."

Watmoughs rejected the Canadian company's approach last December after saying it believed it "fundamentally failed to recognise" its value and future prospects.

Watmoughs employs a total of 650 people in Bradford mainly at its Idle print factory.

Quebecor Printing Inc said the offers for Watmoughs and the British Printing Company were conditional and subject to regulatory approval.

The Canadian group said: "The public interest issues raised by this bid regarding the impact on both customers and employment in the UK are significantly more complex that those raised in QPI's bid for Watmoughs."

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