City warms to BOC's $10bn US talks

SHARES IN BOC soared by more than 10 per cent yesterday as the market reacted positively to expectations of a $10.3bn (pounds 6.3bn) merger between the UK industrial gases group and Praxair of the US.

BOC, announcing strong interim results, refused to comment on the talks with Praxair, aimed at creating the world's biggest gases business.

Group chief executive Danny Rosenkranz said: "I'm steering completely clear of any answers on that. No comment, because I'd go down a very tricky path."

American analysts said the talks had been initiated by Praxair and were the consequence of major senior management problems and a general lack of direction in the US company.

Paul Leming, a chemicals analyst with HSBC in New York, said the current chief executive, Bill Lichtenberger, had not adequately prepared the company for his retirement. "It's been a one-man show for the last five or six years. There's a real sense of lack of direction."

Analysts believe the tie-up between the two similarly-sized companies is likely to be a genuine merger rather than a takeover. BOC is viewed as the stronger party and Mr Rosenkranz is tipped to be in overall control of the new group, which will be listed in London and New York. An announcement on progress of the talks is expected in the next few days.

Share prices throughout the sector rose on the merger speculation and on BOC's buoyant results, which saw the group report first-half pre-tax profits of pounds 184.4m, up from pounds 179.8m.

Mr Rosenkranz said he was encouraged by the group's performance and felt several negative factors - including the Asian economic crisis - which have dogged the group in recent years are being worked through.

"Last year we came through an incredibly tough year. Semi-conductors were through the floor, we had the Pacific markets and currencies plagued us.

"We've taken out a tonne of cost and the management has improved. The mood in BOC is much better," he said, stressing that the group was on course to meet its target of cutting annual costs by pounds 120m.

A UK analyst said the results reflected sentiment in the City that the group had addressed its problems. "The company's looking very good and the signs are that the Far East, 30 per cent of their market, is improving. The indications are that the trading pattern in March will continue into April. Praxair is the icing on the cake of the buy story," he said.

Shares in BOC closed at a 12-month high of 1,138p.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?