Outlook: Acquisitive GEC
Tuesday 27 April 1999
By any yardstick that is a mind-boggling price for a manufacturing company, even one in such a fast-growing sector of the market. The last time GEC went shopping in the US telecoms industry it snapped up a manufacturer of access equipment for a modest two times sales. This time the market saw Lord Simpson coming, which is reflected in the 80 per cent premium GEC is paying to the market valuation of FORE just a month ago.
Then again, there is nothing quite like the Internet phenomenon. This year the volume of data traffic is forecast to outstrip voice traffic, putting GEC's latest acquisition in pole position to capitalise on the explosion in cyberspace.
Apart from taking GEC deeper into telecoms and still further away from washing machines and power engineering, yesterday's deal produces another strange sensation for GEC shareholders. Once completed, GEC will be geared for the first time anyone can remember. Three months ago GEC was a defence electronics company with a cash mountain of pounds 2.7bn. Today it is about to become a telecoms-led company with net debt and a further pounds 3bn of credit still to tap.
With interest rates at such historic lows, it probably makes sense not to have so much tied up in the bank. But nothing could demonstrate more graphically the break GEC has made with the Lord Weinstock era than Lord Simpson's gamble on the Internet age.
Liam Neeson's Downton dreams
- 1 Mario Balotelli: Staff at arson-hit Manchester Dogs' Home convinced Liverpool striker is behind five-figure donation
- 2 Scottish independence live: Scotland gives a clear 'No' in historic referendum - as it happened
- 3 iOS 8 is full of shiny new features - but it's terrible news for app developers
- 4 Friends 20th anniversary: Six things we wouldn't have without influential comedy series
- 5 Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
Scottish independence referendum results: David Cameron pledges plans for 'English votes for English laws' by January
Scottish independence live: Scotland gives a clear 'No' in historic referendum - as it happened
Scottish referendum results: David Cameron set to unveil major devolution of powers to England
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
Portuguese academic says British are 'filthy, violent and drunk'
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...