that a merger between them was being negotiated.

Rumours about a deal between Butterfield and Co. Ltd. and J.S. Vallis Ltd.

have been sweeping the import business for several weeks.

An industry insider said he understood that both parties had held talks about a takeover and were close to reaching an agreement.

"Rumours have been rife for the past month that Butterfield is buying Vallis,'' said the source. "I'm pretty sure it's true.'' However, this was denied yesterday by Butterfield vice president Mr. Jim Butterfield and Vallis president Mr. Francis Vallis. They both said that no takeover talks had been held.

"There's been all sorts of rumours going around,'' said Mr. Butterfield. But he commented: "I'm treating this as just another rumour -- for now.'' Further evidence was thrown up when a secretary at the Toronto offices of Butterfield president Mr. George Butterfield said she was aware of a possible deal taking place in Bermuda.

George, who is said to have a strong influence in the development of the company even though he runs a travel business in Canada's largest city, was travelling in Spain and unavailable for comment.

Mr. Vallis was adamant that no deal was in the offing. "We've had no meetings and there's no information I can tell you about,'' he said.

"There's been a lot of rumours going around for months. But that's all it is -- a rumour. There's no truth in it.

"The industry's been very unsettled since Ward Young got in on the act by buying Weldon and then Purvis distributors.'' Any sort of merger between Butterfield and Vallis would be good for the industry, importers on the Island said yesterday.

"It would make the industry much more competitive and certainly sharpen the industry,'' said one.

"It would probably be a good thing and would lead to a more efficient operation. There should also be some cost savings for the customer.''