Medical giant Amersham surges after £5bn takeover approach

Amersham, the medical technology company which grew out of the Government's atomic energy programme, has attracted a £5bn takeover approach.

The company was forced to admit yesterday that it is in early talks with a mystery bidder, sparking a day of intense speculation over the identity of the predator and sending Amersham shares up 16 per cent.

Analysts said a US firm was the most likely bidder, although Roche, the Swiss pharmaceuticals group, was also in the frame. The diverse nature of the Amersham business meant there was little agreement, even on which industry the approach may come from.

Amersham, led by Sir William Castell, the chief executive, confirmed the approach after takeover speculation pushed its shares up in early trading. The stock had been briefly suspended on the Oslo bourse, which said it was investigating insider trading.

The company said: "Amersham announces that it has received an approach which may or may not lead to an offer for the company as a whole. No agreement has been reached and a further announcement will be made as appropriate."

Amersham shares initially leapt by a quarter as hedge funds scrambled to close short positions, and the stock settled up 89.5p at 641p, valuing the company at £4.5bn.

Sir William has grown Amersham through a string of mergers to become the market leader in diagnostic imaging, making chemicals to enhance the images from x-rays and other body scans. This historic business grew out of a wartime research centre examining uses for radium ore, then used to produce luminous paint for ships and airplanes, and the company became, in 1983, the first to be privatised by Margaret Thatcher's government.

Amersham's newer businesses are protein separations, used in drug research and manufacture, and discovery systems, which makes laboratory equipment for medical research.

Potential bidders mentioned during yesterday's frenzied trading session - when eight times the usual number of Amersham shares were traded - included General Electric, the US conglomerate which already has a product development agreement with Amersham.

Max Herrmann, an analyst at ING Financial Markets, said the company would fit with Roche's diagnostics and drug research interests, and also with the diverse hospital supplies business being expanded by Johnson & Johnson, the US medical giant.

But others believed a perceived undervaluation of the smallest business - the troubled discovery systems division - might be behind the approach.

Mark Brewer of Dresdner Kleinwort Wasserstein said the discovery systems industry was in need of consolidation and this was the Amersham division with the most scope for improvement in margins.

He said: "Any bidder would ultimately break up the company, because none of the potential acquirers has a presence in all three of Amersham's markets. But I am not sure it has to be taken over to achieve value for shareholders, as a break-up is something the company itself could do."

Sir William, already one of the FTSE 100's best paid chief executives with a package worth £1.1m last year, would net £1.8m for his shares in the company if a bid went through at close to the current share price. The 56-year-old former Wellcome executive agreed last year to stay on "for the foreseeable future" as chief executive, prompting a potential successor, John Pafield, to leave the business. Friends say Sir William would like to go out on a deal.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
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

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?