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.

PROMOTED VIDEO
News
Down time: an employee of Google uses the slide to get to the canteen
businessHow bosses are inventing unusual ways of making us work harder
News
Actor, model and now record breaker: Jiff the Pomeranian
news
News
REX/Eye Candy
science
News
i100
Sport
Alexis Sanchez celebrates after scoring his first goal for Arsenal in the Champions League qualifier against Besiktas
sportChilean's first goal for the club secures place in draw for Champions League group stages
Arts and Entertainment
Amis: 'The racial situation in the US is as bad as it’s been since the Civil War'
booksAuthor says he might come back across Atlantic after all
Extras
indybest
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Life and Style
Google Doodle celebrates the 200th birthday of Irish writer Sheridan Le Fanu
tech
Arts and Entertainment
Vinyl demand: a factory making the old-style discs
musicManufacturers are struggling to keep up with the resurgence in vinyl
News
i100
News
In Eternal Sunshine of the Spotless Mind Jim Carrey and Kate Winslett medically erase each other from their memories
scienceTechnique successfully used to ‘reverse’ bad memories in rodents could be used on trauma victims
Arts and Entertainment
Singer Pixie Lott will take part in Strictly Come Dancing 2014, the BBC has confirmed
tv
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

C# Developer (C#, ASP.NET Developer, SQL, MVC, WPF, Real-Time F

£40000 - £48000 per annum + benefits+bonus+package: Harrington Starr: C# Devel...

C# Swift Payment Developer (C#, ASP.NET, .NET, MVC, Authorize.N

£45000 - £60000 per annum + benefits+bonus+package: Harrington Starr: C# Swift...

DevOps Engineer - Linux, Shell, Bash, Solaris, UNIX, Salt-Stack

Negotiable: Harrington Starr: A fast growing Financial Services organisation b...

Trade Desk FIX Analyst - (FIX, SQL, Equities, Support)

£50000 - £60000 per annum + excellent benefits: Harrington Starr: An award-win...

Day In a Page

Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone
Amazon is buying Twitch for £600m - but why do people want to watch others playing Xbox?

What is the appeal of Twitch?

Amazon is buying the video-game-themed online streaming site for £600m - but why do people want to watch others playing Xbox?
Tip-tapping typewriters, ripe pongs and slides in the office: Bosses are inventing surprising ways of making us work harder

How bosses are making us work harder

As it is revealed that one newspaper office pumps out the sound of typewriters to increase productivity, Gillian Orr explores the other devices designed to motivate staff
Manufacturers are struggling to keep up with the resurgence in vinyl records

Hard pressed: Resurgence in vinyl records

As the resurgence in vinyl records continues, manufacturers and their outdated machinery are struggling to keep up with the demand
Tony Jordan: 'I turned down the chance to research Charles Dickens for a TV series nine times ... then I found a kindred spirit'

A tale of two writers

Offered the chance to research Charles Dickens for a TV series, Tony Jordan turned it down. Nine times. The man behind EastEnders and Life on Mars didn’t feel right for the job. Finally, he gave in - and found an unexpected kindred spirit
Could a later start to the school day be the most useful educational reform of all?

Should pupils get a lie in?

Doctors want a later start to the school day so that pupils can sleep later. Not because teenagers are lazy, explains Simon Usborne - it's all down to their circadian rhythms
Prepare for Jewish jokes – as Jewish comedians get their own festival

Prepare for Jewish jokes...

... as Jewish comedians get their own festival
SJ Watson: 'I still can't quite believe that Before I Go to Sleep started in my head'

A dream come true for SJ Watson

Watson was working part time in the NHS when his debut novel, Before I Go to Sleep, became a bestseller. Now it's a Hollywood movie, too. Here he recalls the whirlwind journey from children’s ward to A-list film set
10 best cycling bags for commuters

10 best cycling bags for commuters

Gear up for next week’s National Cycle to Work day with one of these practical backpacks and messenger bags
Paul Scholes: Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United

Paul Scholes column

Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United
Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

Kate Bush shows a voice untroubled by time

A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
Robot sheepdog technology could be used to save people from burning buildings

The science of herding is cracked

Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

This tyrant doesn’t rule

It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?