Amec construction group yesterday rejected a takeover approach from Kvaerner, a Norwegian shipping and engineering group, which mounted a dawn raid in the stock market for 12 per cent of the company's shares.
Kvaerner paid 100p a share, and after a fruitless 40-minute meeting with the Amec board announced that any further purchases would not be at a higher price.
Kvaerner did not make a firm offer, but at 100p a share analysts said Amec's ordinary and a large number of preference shares would be valued at more than pounds 370m. Amec shares rose 21p to 99p.
Sir Alan Cockshaw, chairman of Amec, said that such a price grossly undervalued the company, which was beginning to see some of the benefits restructuring after a long period of depression.
It is thought that both sides accepted the industrial logic of closer co-operation. Kvaerner, whose interests range from paper to shipping, has substantial facilities building oil and gas platforms, while Amec has management expertise.
Kvaerner said yesterday that it was only interested in a takeover of Amec, not closer links, and was considering its options, though analysts said Norwegian companies rarely mounted hostile takeovers. Kvaerner has grown organically, and by agreed acquisitions.
Erik Toenseth, chief executive of Kvaerner, said: "Having sought constructive discussions with Sir Alan Cockshaw at a meeting which took place today, I was disappointed that we were not able to make progress. While Sir Alan clearly recognised the industrial logic of extensive co-operation between our two firms, we were unable to agree on a way forward."
Yesterday's share raid, executed by SBC Warburg, netted 20 million shares, and sparked widespread speculation that either McAlpine or the French Bouygues group were behind the purchase.
Howard Proctor, building analyst at SG Strauss Turnbull, said that he was surprised anybody would want to buy control or a stake in any UK contractor, given the sector's present troubles.
All Britain's contractors have seen their margins pressed down to virtually nothing this year and say they are struggling to secure new contracts that pay.
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