Wellstream spurns £755m takeover offer from GE

The oil industry services group Wellstream Holdings has rejected a £755m bid from giant US conglomerate General Electric.

GE said yesterday that it was "disappointed" the board of London-listed Wellstream, which focuses on the fast-growing Brazilian offshore market, refused its 750p-a-share proposal.

"GE is disciplined in its acquisitions, and as such, there can be no certainty that it will take any further action," the company said in a statement to the Stock Exchange. The company reserved the right to make an offer on "less favourable" terms following the completion of due diligence.

GE is not expected to go hostile, not least because its offer is well below the prices of 800p-per-share and above estimated for Wellstream by the majority of City analysts.

Wellstream itself declined to comment yesterday, raising expectations that the company is in talks with another possible suitor.

The Newcastle-based group is the world's largest supplier of flexible pipes used in offshore drilling and is also closely involved in the technical advances needed to develop the so-called "sub-salt" deposits in the deep water off Brazil.

The company has been the subject of widespread takeover rumours for some months and in mid-September Wellstream's management confirmed the company had received a number of preliminary approaches. The group declined to give any names, but several are still tipped as possible acquirers of Wellstream, including National Oilwell Varco and Saipem.

Peter Hitchens, an oil and gas analyst at Panmure Gordon, said: "Wellstream is an attractive opportunity for any predator."

The group's stock has risen more than 40 per cent to over 770p since the start of September, fuelled by speculation about the company's future. But it dropped by 2.44 per cent to close at 761p yesterday, despite suggestions that the statement from GE might prove a boost to any other talks.

Keith Morris, an analyst at Evolution Securities, said: "Another suitor may break cover now that GE has laid its cards on the table and indicated that 750p is the upper end of its price range."

Wellstream's most recent financial results, in August, showed an order backlog up by 14 per cent to £246m in the first half of the year, and gross margin improved by nearly one percentage point to 24.6 per cent. But the group issued a profits warning in July and first-half pre-tax profits dropped from £26m to £11m. The company blamed a "subdued" market outside Brazil.

Wellstream is particularly active in Brazil, which contributed around half the company's revenues. Recent major contract wins with state-owned Petrobras in the Marlim Sul field and another substantial supply contract with OGX helping boost the forward order book.

PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Taste the difference: Nell Frizzell tucks into a fry-up in Jesse's cafe in east London
food + drinkHow a bike accident left one woman living in a distorted world in which spices smell of old socks and muesli tastes like pork fat
Sport
Luke Shaw’s performance in the derby will be key to how his Manchester United side get on
footballIt's not a game to lose, writes Paul Scholes
Arts and Entertainment
Don’t send in the clowns: masks and make-up conceal true facial expressions, thwarting our instinct to read people’s minds through their faces, as seen in ‘It’
filmThis Halloween, we ask what makes Ouija boards, demon dolls, and evil clowns so frightening?
News
peopleFarage challenges 'liberally biased' comedians to 'call him a narcissist'
Arts and Entertainment
Liam and Zayn of One Direction play with a chimpanzee on the set of their new video for 'Steal My Girl'
music
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

Finance Assistant - Part time - 9 month FTC

£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...

Marketing Manager

£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...

Market Risk Manager - Investment Banking - Mandarin Speaker

£45,000 - £65,000: Saxton Leigh: Our client is a well-known APAC Corporate and...

Compensation and Benefits Manager - Brentwood - Circa £60,000

£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...

Day In a Page

The drugs revolution starts now as MPs agree its high time for change

The drugs revolution starts now as MPs agree its high time for change

Commons debate highlights growing cross-party consensus on softening UK drugs legislation, unchanged for 43 years
The camera is turned on tabloid editors in Richard Peppiatt's 'One Rogue Reporter'

Gotcha! The camera is turned on tabloid editors

Hugh Grant says Richard Peppiatt's 'One Rogue Reporter' documentary will highlight issues raised by Leveson
Fall of the Berlin Wall: It was thanks to Mikhail Gorbachev that this symbol of division fell

Fall of the Berlin Wall

It was thanks to Gorbachev that this symbol of division fell
Halloween 2014: What makes Ouija boards, demon dolls, and evil clowns so frightening?

What makes ouija boards and demon dolls scary?

Ouija boards, demon dolls, evil children and clowns are all classic tropes of horror, and this year’s Halloween releases feature them all. What makes them so frightening, decade after decade?
A safari in modern Britain: Rose Rouse reveals how her four-year tour of Harlesden taught her as much about the UK as it did about NW10

Rose Rouse's safari in modern Britain

Rouse decided to walk and talk with as many different people as possible in her neighbourhood of Harlesden and her experiences have been published in a new book
Welcome to my world of no smell and odd tastes: How a bike accident left one woman living with unwanted food mash-ups

'My world of no smell and odd tastes'

A head injury from a bicycle accident had the surprising effect of robbing Nell Frizzell of two of her senses

Matt Parker is proud of his square roots

The "stand-up mathematician" is using comedy nights to preach maths to big audiences
Paul Scholes column: Beating Manchester City is vital part of life at Manchester United. This is first major test for Luke Shaw, Angel Di Maria and Radamel Falcao – it’s not a game to lose

Paul Scholes column

Beating City is vital part of life at United. This is first major test for Shaw, Di Maria and Falcao – it’s not a game to lose
Frank Warren: Call me an old git, but I just can't see that there's a place for women’s boxing

Frank Warren column

Call me an old git, but I just can't see that there's a place for women’s boxing
Adrian Heath interview: Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room

Adrian Heath's American dream...

Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room
Simon Hart: Manchester City will rise again but they need to change their attitude

Manchester City will rise again but they need to change their attitude

Manuel Pellegrini’s side are too good to fail and derby allows them to start again, says Simon Hart
Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities
‘A bit of a shock...’ Cambridge economist with Glasgow roots becomes Zambia’s acting President

‘A bit of a shock...’ Economist with Glasgow roots becomes Zambia’s acting President

Guy Scott's predecessor, Michael Sata, died in a London hospital this week after a lengthy illness
Fall of the Berlin Wall: History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War

Fall of the Berlin Wall

History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War
How to turn your mobile phone into easy money

Turn your mobile phone into easy money

There are 90 million unused mobiles in the UK, which would be worth £7bn if we cashed them in, says David Crookes