New bid trumps Siebe offer for Whessoe

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The Independent Online
Whessoe, the Darlington-based instrumentation group, yesterday unexpectedly found itself at the centre of a contested takeover battle after two continental groups launched a pounds 52.6m rival offer to the pounds 46m deal only recently agreed with the Siebe engineering giant.

Seatex Garex, a Norwegian navigation systems group soon to be renamed Navia, and Endress & Hauser, a Swiss maker of process controls, have teamed up to make a joint bid at 175p a share, well above the 155p which the Whessoe board backed a fortnight ago. The consortium scooped up a 10.6 per cent stake at 175p in its target yesterday from its three leading institutional shareholders: M&G, Aberforth and PDFM, the fund management arm of UBS, the Swiss bank which is advising the bidders.

News of the bid prompted a 27p rise in Whessoe's share price to 184p yesterday as the market anticipated Siebe returning with a higher offer. Siebe would only say it was considering its options and would make a statement in due course.

The move by the continental groups follows an approach by Seatex to Whessoe in November 1995 for its Autronica offshoot, a marine automation and fire detection business which, like Seatex, is based in Tronheim, Norway. The Norwegian group later teamed up with Endress and earlier this month entered discussions with the Siebe board in an attempt to gain a recommendation for a bid for the whole group. These talks lapsed after Siebe announced what was at was at that stage a higher offer.

Christopher Fleetwood, Whessoe's chief executive, described the latest move as "a slightly unusual turn of events". The latest bid would have to be considered by the board before it reported back to shareholders, he said.

The recent share price performance represents a remarkable rebound from the six-year low of 86.5p hit last December after the group unveiled a 57 per cent fall in profits to pounds 560,000 in its first full-year since withdrawing from its former engineering businesses. Analysts are expecting profits to rebound to around pounds 4m this year, which the consortium said meant its offer was worth over 22 times expected earnings.

Mr Fleetwood said around half the group's revenues would be derived from new products by 1998, including a large number due later this year.