Rival offers spark £820m bid battle  over Kentz

 

Shares in Kentz leapt 24 per cent after the FTSE 250 engineer rejected two takeover offers yesterday, triggering City expectations of an £820m multi-way bidding battle.

Kentz said that Amec, its larger, London-listed rival, had made a cash offer of between 565p and 580p a share, sharply higher than the Friday closing price of 476p. That was itself 10 per cent higher than the price on 5 August, when Amec first made its intentions clear to Kentz, after first contacting the engineer in July.

The British company added that the German construction group M+W, owned by the private Austrian conglomerate Stumpf, had also talked to its board about an offer, lower than Amec’s, but that Kentz had rejected both approaches as they “undervalued the company”.

The City, however, expects a bid battle. “A lot of companies could come in and join the fight for Kentz,” said one engineering analyst, who named the US giants Fluor and KBR as potential buyers. The Canadian engineer SNC-Lavalin has also been linked to an approach.

“For companies who want a bigger role in construction, or that may be struggling to grow, like Amec, Kentz seems like a sensible deal.”

The approach by Amec, the blue-chip oil equipment services group, values its smaller rival at £680m; but City sources said Kentz, which started out as a family-owned electrical business in south Tipperary in 1919 and floated on AIM in 2008, could fetch up to 700p a share, valuing it at almost £820m.

“If a deal was to go ahead at anything less than 700p, we would regard it as a very cheap acquisition,” Dougie Youngson at VSA Capital said. Kentz now has mining, oil and gas and infrastructure projects across the globe, a market capitalisation of almost £700m and 14,500 employees. Amec’s work for companies such as BP and the US navy has given it a market capital of £3.2bn and annual revenues of £4.2bn.

Amec said it wanted to buy Kentz to “extend [its] geographic footprint in the growth regions, increase the range of services offered to clients, and enhance its position in oil and gas and mining.”

But a source close to Kentz said the company “never was, is not and will not be organising a strategic process to dispose of the business”. He added that Kentz’s investor list was “stuffed with long-only conviction shareholders”, including its Malaysian backer Kerbet, which bought the company to market in 2008 and retains a 13 per cent stake. Standard Life owns 7 per cent, Legal & General 6 per cent, and Schroder 5 per cent.

The company could face scrutiny from the Financial Conduct Authority, the City watchdog, over a 10 per cent jump in its shares before Amec and Kentz went public about their talks yesterday. The FCA said it could not comment on individual cases. Shares in Kentz rose 115.1p to 591p yesterday.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Life and Style
life
Arts and Entertainment
Cold case: Aaron McCusker and Christopher Eccleston in ‘Fortitude’
tvReview: Sky Atlantic's ambitious new series Fortitude has begun with a feature-length special
Voices
Three people wearing masks depicting Ed Miliband, David Cameron and Nick Clegg
voicesPolitics is in the gutter – but there is an alternative, says Nigel Farage
Voices
The veterans Mark Hayward, Hugh Thompson and Sean Staines (back) with Grayson Perry (front left) and Evgeny Lebedev
charity appealMaverick artist Grayson Perry backs our campaign
News
i100
News
people
ebooks
ebooksA special investigation by Andy McSmith
Sport
Chelsea manager Jose Mourinho
footballThe more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Life and Style
Vote green: Benoit Berenger at The Duke of Cambridge in London's Islington
food + drinkBanishes thoughts of soggy school dinners and turn over a new leaf
News
Joel Grey (left) poses next to a poster featuring his character in the film
peopleActor Joel Grey comes out at 82
News
i100
News
business
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 Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee