Company of the week: General Electric
Sunday 07 March 1999
GEC agreed to pay Kohlberg Kravis Roberts & Co, a private investment firm that owns 81.5 pecent of Reltec, and other investors $29.50 (pounds 18.34) a share in cash. That's a 36 per cent premium to Reltec's closing price on Friday, though just 50c more than its initial public offering price of $29 a share a year ago. London-based GEC also will assume $361m of Reltec debt.
The agreement comes just six weeks after GEC said it would sell its defence- electronics business to British Aerospace for pounds 7.8bn. GEC expect Reltec, which makes devices that help phone networks carry more calls, to give it a foothold in the lucrative North American market.
"Reltec has great distribution with the largest phone companies." said Gregory Geiling, an analyst at JP Morgan Securities, who has a "buy" rating on Reltec stock.
Chief executive George Simpson said GEC will draw on cash reserves to pay for the purchase and still has "plenty" of cash left to pay for other acquisitions.
The sale is a win for KKR, the largest leveraged-buyout firm, which paid $475m for its stake in Reltec in 1995. That stake is now worth $1.71bn. Other investors aren't so lucky.
Reltec went public at $29 a share a year ago, and rose as high as $49.125. Investors were enthusiastic about the company, whose products, called digital loop carriers, funnel traffic on local networks from customers to larger pipes that connect to the internet and other networks. Telephone companies use the products to help handle mushrooming internet and data traffic.
Still, not all investors were so smitten. Reltec competes against Northern Telecom, Lucent Technologies and others in a market that's very price competitive.
Kirstie Allsopp has waded into the female fertility debate again
Gillian Anderson lays into gender disparity in Hollywood
- 1 Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
- 2 Prince held a Facebook Q&A and this is the only question he answered...
- 3 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 4 35,000 walrus gather on north-west Alaska beach 'for a rest'
- 5 Brad Pitt, on the moment he completely lost his temper with Clint Eastwood's son
Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
Prince held a Facebook Q&A and this is the only question he answered...
Brad Pitt, on the moment he completely lost his temper with Clint Eastwood's son
Jennifer Lawrence nude photos leak: More celebrities allegedly targeted as third wave of hacked images released
Cheryl Cole named 'the most dangerous celebrity' on the internet
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
Former Tory donor Arron Banks ups his Ukip donation to £1million following William Hague 'nobody' comment
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Should gay sex be illegal? 16% of Britons think so
Mark Reckless becomes second Tory MP to defect to Ukip in a month
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...