Bid battle looms as oven maker Enodis rejects £796m offer
Tuesday 16 May 2006
Hopes of a bidding war for Enodis, the oven maker, sent shares in the company up by more than 13 per cent yesterday, despite the management's stern rejection of a £796m bid for the business at the weekend.
In a bid to fight off the approach, or possibly to entice a higher offer, Enodis brought forward the publication of its interim results yesterday, unveiling a better than expected 71 per cent rise in pre-tax profits for the period, and insisting prospects were very strong for the year ahead.
Middleby Corp, a US-based rival, made its unofficial 195p a share offer for Enodis in a letter to the group on Friday. However, in a statement on Saturday, the board of Enodis said the bid "significantly undervalued the company and its prospects", rejecting Middleby's requests for a meeting.
Dave McCulloch, the chief executive, said yesterday the company had "a good and robust strategy", adding that he had full confidence in the management's ability to continue to deliver value to shareholders. He would not be drawn on how high an offer it would take for the board to agree to talks.
Revenues and profits rose across all regions in which the group operates during the first half, with total sales up some 15 per cent.
Mr McCulloch said a greater emphasis on "grab-and-go" food culture was driving the company's sales, as food businesses came under pressure to upgrade their technology and infrastructure, to meet demand for higher quality products which could be delivered in shorter times.
Enodis makes fryers, grills and refrigerators for fast-food restaurants such as McDonald's and Burger King, with the largest share of the group's revenues earned in the US.
Transatlantic sales have been driven over the past year by the company's development of its popular "Accelerated Cooking Technology", which has helped restaurants significantly reduce the cooking time of some meals.
The group said it would pay an interim dividend of 0.83p, and is expected to pay a final dividend in the region of 1.65p
Although Middleby said yesterday that its offer for Enodis fully valued the business, it said it would wait to see how investors reacted before deciding whether to withdraw or not.
Analysts said they would not be surprised if Middleby raised its offer, or if a rival bidder moved in for the company.
After rising as much as 18 per cent yesterday afternoon, Enodis's shares eventually closed up 13.7 per cent at 199.5p - their highest close for five years - giving the company a market value of £797m.
The shares have risen more than a third over the past week, since rumours of the bid first leaked into the market.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...