Metso rejects Weir £3.7bn takeover bid
Weir Group was forced to put its ambitions of building an engineering empire on hold after Finnish rival Metso rejected a second, £3.7 billion takeover attempt.
But City analysts immediately speculated that Weir’s chief executive Keith Cochrane might now turn his attentions to FTSE 100 peer IMI.
Weir’s latest all-share merger bid, made last week, was a 13 per cent increase on the previous deal submitted in March. It valued Metso’s shares at 30.49 (2477p) each, a 34 per cent premium on its value on the day before Weir submitted its initial proposal.
In a statement, Weir said it had “made a compelling proposal but remains financially disciplined and therefore does not intend to pursue this opportunity further at this time.”
However, sources close to Weir noted that Metso’s latest rejection had one important difference from the one which followed the first offer: then, Metso said that the board was “unanimous” in concluding the offer was too low; this time, the word was absent suggesting that some — but not a majority — of directors were willing to talk.
A source said that the “only way this would work now” would be if Metso’s shareholders went directly to management and order them to open discussions. Weir would not go hostile, but executives are convinced that costs savings of £150 million a year would benefit both companies’ investors if the two were put together.
Metso chairman Mikael Lilius said there was a “real opportunity to create significant value for all its shareholders by pursuing its own course”.
If shareholders don’t press Metso’s management for answers, Weir — a 143-year-old engineer which carries out broad range of work from maintaining wind farms to building oil rig pumps — would look to annex rivals elsewhere.
“Weir does not intend to sweeten the deal but we believe that the landscape for pumps and valves engineers, including names such as IMI and Sulzer, remains ripe for consolidation,” said analysts at Liberum in a note. Shares in IMI edged up 0.4 per cent to 1552p.
It is the second Footsie takeover to collapse this week, after Pfizer walked away from its pursuit of AstraZeneca. It is also the second failed effort by a big British manufacturer to make a major Finnish purchase in six months.
In January, Rolls-Royce confirmed reports that it had wanted to buy Wärtsilä, which instead chose to focus on restructuring the group, including plans to slash 1000 jobs.
Weir’s investors were disappointed at today’s news, and shares dropped 36p, or 1.4%, to 2568p.
- 1 Gun instructor accidentally shot dead by nine-year-old girl with Uzi gun
- 2 Miley Cyrus' homeless MTV VMAs date, Jesse Helt, is wanted by the police
- 4 Pamela Anderson rejects ice bucket challenge because of ALS experiments on animals: 'Mice had holes drilled into their skulls'
- 5 Homer Simpson has taken the ALS ice bucket challenge because of course he has
Exclusive: We share blame for creating 'jihad generation', says Muslim strategist
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
Jeremy Clarkson is a cultural tumour and needs to be removed, says comedian Frankie Boyle
- < Previous
- Next >
iJobs Money & Business
£40000 - £48000 per annum + benefits+bonus+package: Harrington Starr: C# Devel...
£45000 - £60000 per annum + benefits+bonus+package: Harrington Starr: C# Swift...
Negotiable: Harrington Starr: A fast growing Financial Services organisation b...
£50000 - £60000 per annum + excellent benefits: Harrington Starr: An award-win...