Enodis rejects £1.3bn merger approach from Aga maker

Enodis, the industrial oven manfacturer, shunned a £1.3bn merger approach from the maker of the Aga last night, arguing that the terms significantly undervalued the business.

Aga Food Service has made a nil-premium bid for its rival, offering to pay half in cash and half in shares. Aga's chief executive William McGrath said the two companies were "natural merger partners" because of Enodis's strength in the US market and Aga's European presence.

But Enodis, which has already turned away bid approaches from US rivals Middleby and Manitowoc this year, rejected the offer. It did allow Manitowoc to conduct due diligence after the Wisconsin-based company offered about £900m for the business before discussions were abandoned due to concerns over regulatory clearance in the US, where Enodis derives 75 per cent of its sales.

Enodis shares had jumped 7 per cent to 198.5p on speculation that an offer for the company had been lodged yesterday. Shortly after the market closed, Enodis confirmed that Aga had approached it in mid-October regarding a nil-premium all-share merger or alternatively an acquisition of Enodis for no premium split 50-50 between cash and shares.

Enodis said it had rejected the offer as it undervalued the business. It also said Aga's consumer appliances and retail operations would clash with its commercial food equipment business. David McCulloch, the chief executive of Enodis, said: "Enodis exited the consumer segment some time ago through the sale of Magnet and the cessation of Garland's high-end residential business. We therefore see no long-term benefit for our shareholders in a merger with Aga."

In contrast to Mr McGrath's comments, Mr McCulloch said: "Enodis and Aga are very different businesses."

Enodis manufactures ovens, refrigerators and fryers for fast-food restaurants such as McDonald's, Subway and Burger King. The company has benefited as its customers have refocused menus to include healthier options and have thus invested in new kitchen equipment.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Recruitment Genius: Experienced Financial Advisers and Paraplanners

Negotiable: Recruitment Genius: This extremely successful and well-established...

Guru Careers: FX Trader / Risk Manager

Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...

Day In a Page

How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

How to stop an asteroid hitting Earth

Would people cooperate to face a global peril?
Just one day to find €1.6bn: Greece edges nearer euro exit

One day to find €1.6bn

Greece is edging inexorably towards an exit from the euro
New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

'Iron Man' augmented reality technology could become reality

Holographic projections would provide extra information on objects in a person's visual field in real time
Sugary drinks 'are killing 184,000 adults around the world every year'

Sugary drinks are killing 184,000 adults around the world every year

The drinks that should be eliminated from people's diets
Pride of Place: Historians map out untold LGBT histories of locations throughout UK

Historians map out untold LGBT histories

Public are being asked to help improve the map
Lionel, Patti, Burt and The Who rock Glasto

Lionel, Patti, Burt and The Who rock Glasto

This was the year of 24-carat Golden Oldies
Paris Fashion Week

Paris Fashion Week

Thom Browne's scarecrows offer a rare beacon in commercial offerings
A year of the caliphate:

Isis, a year of the caliphate

Who can defeat the so-called 'Islamic State' – and how?
Marks and Spencer: Can a new team of designers put the spark back into the high-street brand?

Marks and Spencer

Can a new team of designers put the spark back into the high-street brand?
'We haven't invaded France': Italy's Prime Minister 'reclaims' Europe's highest peak

'We haven't invaded France'

Italy's Prime Minister 'reclaims' Europe's highest peak
Isis in Kobani: Why we ignore the worst of the massacres

Why do we ignore the worst of the massacres?

The West’s determination not to offend its Sunni allies helps Isis and puts us all at risk, says Patrick Cockburn
7/7 bombings 10 years on: Four emergency workers who saved lives recall the shocking day that 52 people were killed

Remembering 7/7 ten years on

Four emergency workers recall their memories of that day – and reveal how it's affected them ever since
Humans: Are the scientists developing robots in danger of replicating the hit Channel 4 drama?

They’re here to help

We want robots to do our drudge work, and to look enough like us for comfort. But are the scientists developing artificial intelligence in danger of replicating the TV drama Humans?
Time to lay these myths about the Deep South to rest

Time to lay these myths about the Deep South to rest

'Heritage' is a loaded word in the Dixie, but the Charleston killings show how dangerous it is to cling to a deadly past, says Rupert Cornwell
What exactly does 'one' mean? Court of Appeal passes judgement on thorny mathematical issue

What exactly does 'one' mean?

Court of Appeal passes judgement on thorny mathematical issue