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 What happens to your body when you give up sugar?
- 2 Licence fee: What is the BBC charge – and how will the changes affect you?
- 3 This is what the photographer has to say about the picture of a weasel riding a woodpecker
- 4 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 5 Have sex with your iPad thanks to the new sex toy no-one asked for
Bill Clinton portrait features Monica Lewinsky reference, artist admits
Japanese island overrun with cats after population explodes
Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
Pornhub turns masturbation into energy in bid to save the planet
The 'sex selfie stick' lets you FaceTime the inside of a vagina
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Durham Free School: 'Creationism taught at' free school facing closure
Ukip would cut billions from Scottish budget to fund English tax cuts
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
iJobs Money & Business
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...
£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...
£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...