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.Reuse content