Kvaerner launches Amec bid

RUSSELL HOTTEN

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.

Travel
travel
News
Tim Vine has won the funniest joke award at the Edinburgh Festival 2014
peopleTim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
Sport
sportBesiktas 0 Arsenal 0: Champions League qualifying first-leg match ends in stalemate in Istanbul
News
Jamie and Emily Pharro discovering their friend's prank
video
PROMOTED VIDEO
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Sport
Manchester United are believed to have made a £15m bid for Marcos Rojo
sportWinger Nani returns to Lisbon for a season-long loan as part of deal
News
news
News
i100
Arts and Entertainment
O'Toole as Cornelius Gallus in ‘Katherine of Alexandria’
filmSadly though, the Lawrence of Arabia star is not around to lend his own critique
Life and Style
fashion
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

Business Anaylst

£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

Senior Project Manager

£60000 - £90000 per annum + Bonus: Harrington Starr: Global leading Energy Tra...

Associate CXL Consultant

£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

Oil & Energy Business Anaylst

£45000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Harrington Sta...

Day In a Page

Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home
Lauded therapist Harley Mille still in limbo as battle to stay in Britain drags on

Lauded therapist still in limbo as battle to stay in Britain drags on

Australian Harley Miller is as frustrated by court delays as she is with the idiosyncrasies of immigration law
Lewis Fry Richardson's weather forecasts changed the world. But could his predictions of war do the same?

Lewis Fry Richardson's weather forecasts changed the world...

But could his predictions of war do the same?
Kate Bush asks fans not to take photos at her London gigs: 'I want to have contact with the audience, not iPhones'

'I want to have contact with the audience, not iPhones'

Kate Bush asks fans not to take photos at her London gigs
Under-35s have rated gardening in their top five favourite leisure activities, but why?

Young at hort

Under-35s have rated gardening in their top five favourite leisure activities. But why are so many people are swapping sweaty clubs for leafy shrubs?
Tim Vine, winner of the Funniest Joke of the Fringe award: 'making a quip as funny as possible is an art'

Beyond a joke

Tim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

Sadly though, the Lawrence of Arabia star is not around to lend his own critique
Wicken Fen in Cambridgeshire: The joy of camping in a wetland nature reserve and sleeping under the stars

A wild night out

Wicken Fen in Cambridgeshire offers a rare chance to camp in a wetland nature reserve
Comic Sans for Cancer exhibition: It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans

Comic Sans for Cancer exhibition

It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans
Besiktas vs Arsenal: Five things we learnt from the Champions League first-leg tie

Besiktas vs Arsenal

Five things we learnt from the Champions League first-leg tie
Rory McIlroy a smash hit on the US talk show circuit

Rory McIlroy a smash hit on the US talk show circuit

As the Northern Irishman prepares for the Barclays, he finds time to appear on TV in the States, where he’s now such a global superstar that he needs no introduction
Boy racer Max Verstappen stays relaxed over step up to Formula One

Boy racer Max Verstappen stays relaxed over step up to F1

The 16-year-old will become the sport’s youngest-ever driver when he makes his debut for Toro Rosso next season
Fear brings the enemies of Isis together at last

Fear brings the enemies of Isis together at last

But belated attempts to unite will be to no avail if the Sunni caliphate remains strong in Syria, says Patrick Cockburn
Charlie Gilmour: 'I wondered if I would end up killing myself in jail'

Charlie Gilmour: 'I wondered if I'd end up killing myself in jail'

Following last week's report on prison suicides, the former inmate asks how much progress we have made in the 50 years since the abolition of capital punishment