BOSSES at Wellington's largest manufacturing firm are continuing talks with a South African furniture company over a possible take-over.

Steinhoff International Holdings Ltd could make an offer for the entire issued ordinary share capital of the Relyon Group if talks are concluded satisfactorily.

Employees were told in March that Relyon was in talks with the company.

Relyon chief executive Ian Topping said: "There's a lot of speculation at the moment."

Steinhoff is the leading manufacturing and distribution company in South Africa, and one of the top five in Europe. It has sales of over £500million a year from its 77 factories with annual profits of around £50million.

Relyon's Group results, announced to December, 2000, showed a 37 per cent rise in pre-tax profits of £4.2 million against £3.1 million for 1999.