Linread accepts bid

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The Independent Online
LINREAD shares jumped 63p to 216p yesterday after McKechnie, the metals and plastics company, launched a pounds 27.8m recommended all- share bid, writes Russell Hotten.

McKechnie's offer of 17 shares for every 36 of Linread's values the shares in its fellow West Midland engineer at 228p. Linread directors and family interests representing 22 per cent of the shareholders have pledged support.

The company, which makes components for the aerospace and automotive industries, recently underwent a reorganisation.

McKechnie, which would merge Linread with its own engineering arm and open it to wider international markets, believes the reorganisation is almost complete and the company is ready for an upturn.

Tim Bennett, analyst at Albert E Sharp, said Linread would be a good bolt-on and McKechnie should be able to raise its margins. But last month McKechnie shares fell 24p to 500p on continuing losses in America and the City may question whether it should be making acquisitions until the US businesses are sorted out.

McKechnie shares fell 13p to 474p. Its pre-tax profits to 31 July were pounds 24.5m ( pounds 23m) on turnover of pounds 314m ( pounds 286m). Linread's 1993 profits were pounds 900,000 ( pounds 700,000) on pounds 36m ( pounds 38m) turnover.

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