Kvaerner launches Amec bid
Tuesday 28 November 1995
The Norwegian industrial group Kvaerner has launched a hostile bid for UK construction group Amec, which yesterday terminated merger talks with its UK rival Alfred McAlpine.
Amec said the offer, expected to be worth about pounds 375m once a price has been put on the large number of preference shares in issue, "fundamentally undervalued its potential".
Kvaerner is interested in Amec's oil and gas interests, and intends to dispose of the housebuilding business, Fairclough Homes, and other development operations. The Norwegian company, which owns the Govan shipyard in Scotland, said its pounds 1-a-share offer would be open for 21 days - not the normal 60 - leaving Amec little time to rush out a defence. Kvaerner yesterday bought another 2 per cent of Amec, bringing its holding to 14 per cent, and follows last Thursday's dawn raid, which lifted its stake from 2 to 12 per cent.
Amec had tried to reach an agreed merger with McAlpine, but these talks fell apart yesterday when the McAlpine board "unanimously rejected" Amec's all-share offer.
Several analysts felt that Amec would struggle to mount a solo defence. "It is going to be pretty hard, given the state of the markets," said Howard Seymour. "Nor may investors believe in the long-term future for contracting at the moment." Another analyst said that Amec's defence would be "wafer-thin".
Kvaerner's offer of pounds 1 a share values Amec's ordinary capital at pounds 202.6m, a 28.2 per cent premium on last Wednesday's closing price. The preference shares are worth about pounds 172m. Kvaerner said: "Proposals will be made to preference shareholders within seven days."
Kvaerner and Amec are among the leading suppliers of equipment to the North Sea oil and gas industry, and the UK company is also strong in Asia and South America. Kvaerner, which has a market value of NK9.7bn (pounds 995m), wants Amec's contracting expertise, which would help the company embark on large turn-key projects around the world.
Erik Tonseth, Kvaerner's chief executive, said: "We believe the skills that Amec will bring to the combined group will enhance the prospects for both Kvaerner's business and those of Amec. A combination with Kvaerner will provide Amec with opportunities that would not otherwise be open to it."
He added that there would be no large rationalisation programme, and declined to put a value on the companies likely to be sold off.
Amec shares closed just 2p up at 98p, indicating that the markets felt Kvaerner has no intention of raising its offer. Amec's two-for-one share offer to McAlpine was worth about pounds 133m and implied a value of about 70p per Amec share.
Amec said that it had been discussing a deal with McAlpine for some weeks, and first proposed an offer on 24 November. Analysts believe those talks could restart if Amec escapes the clutches of Kvaerner.
- 2 Migrant crisis: Greek soldier saved 20 people singlehandedly off Rhodes beach
- 3 Sofyen Belamouadden murder: The inside story of a crime that horrified Britain
- 4 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 5 Ian Brady: Moors murderer announces his support for Ukip and the SNP
Migrant crisis: Greek soldier saved 20 people singlehandedly off Rhodes beach
Russian hack of President Obama's emails worse than previously admitted
Ian Brady: Moors murderer announces his support for Ukip and the SNP
UK weather: Britain braced for snow to replace sun as arctic air mass moves in
Nepal earthquake: US Pastor Tony Miano sparks outcry by suggesting Nepalis should convert and not rebuild their 'pagan shrines'
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
General Election 2015: Britain would become a 'communist dictatorship' under Ed Miliband and Nicola Sturgeon, claims wife of Michael Gove
iJobs Money & Business
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...
£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...