Amec hits back at Kvaerner

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The Independent Online
CITY analysts expect turmoil in trading of Amec shares tomorrow as it seeks to fend off Norwegian suitor Kvaerner with a pounds 100m plus bid for construction group Alfred McAlpine.

Amec stock, which soared on Thursday after the Norwegian shipping giant swooped in a "dawn raid" to pick up a 10 per cent stake at 100p, closed the week at 96p, valuing the company at pounds 194m.

Amec will come under pressure to explain its intentions towards McAlpine after its troubled rival revealed an Amec merger proposal, offering two of its own shares for every one McAlpine share.

Shares in McAlpine surged 18p to 159p as a result, but still ended at a heavy discount to the 192p value implied by Amec's current share price, boosted by the Kvaerner raid.

A full Kvaerner bid still remains uncertain, however, and analysts were at loss to explain why Amec shares were so strong.

"At 95p, that means the downside in Amec's shares is far greater than the upside," said one puzzled broker. "It seems somebody is propping up the share price." A spokesman for SBC Warburg, Kvaerner's adviser, was unable to confirm whether it was also buying shares on its own account on Friday.

Kvaerner chief executive, Erik Toenseth, said its stake price valued Amec at far more than Amec's management did by virtue of the McAlpine bid terms.