Takeover Panel raps Honeywell

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The Independent Online

Honeywell received a rap on the knuckles from the Takeover Panel yesterday over a vague statement from the US industrial giant which said it might raise its offer for the crash-test dummy maker First Technology.

Honeywell said in a statement to the Stock Exchange yesterday "it was considering whether to raise its offer". This followed last week's 330p-a-share bid from the American tools hire group Danaher, which trumped Honeywell's original 275p-a-share offer for the UK engineer.

But the Takeover Panel lambasted Honeywell's latest disclosure, saying it breached panel rules. "An offerer must not make a statement to the effect that it may improve its offer [for a company] without committing itself to doing so and specifying the improvement." Honeywell has admitted there is no certainty it will raise its offer for First Technology.

The City expects a counter-offer to Danaher's £251m approach. First Technology shares closed at 350.5p yesterday, well above Danaher's offer. At the last count, it controlled 19.5 per cent of the UK engineer compared with 4 per cent for Honeywell. However, Sterling Investment, Artemis Investment Management and Jupiter Asset Management, which between them hold 13 per cent of the stock, have pledged to back Honeywell if it matches a competing offer.

Morley Fund Management, which owns 10 per cent of First Technology and plans to support Danaher, has said it will switch to a rival offer should one be made before Friday and be pitched at least 5 per cent higher.

Danaher's offer represents a 63 per cent premium to First Technology's valuation just before the bid. Analysts believe both US groups are attracted to the engineer because of its gas-detection business. The sensors it makes have become an important part of the oil production process as they are able to detect gas leaks.

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