Siebe bid may spark battle for APV

Stock market dealers were yesterday anticipating a possible bid tussle for APV after the rival Siebe engineering group launched an agreed pounds 331m offer which would create the world's leading supplier of process control systems for the food, drink and pharmaceutical industries.

APV's shares, which were 66p before it first revealed an approach at the end of April, soared 17p to 106.5p yesterday, just above the Siebe bid terms. Siebe is offering 0.10955 of its own shares for every one in APV, valuing the latter at just above 106p after the Siebe price rose 11.5p to 970p yesterday. Siebe is shaving around pounds 3.5m off its bid costs by underwriting 46 per cent of 97.5p cash alternative from its own resources.

APV announced it had received a second "indication of interest" just two days after Siebe's approach and analysts were yesterday keeping an open mind as to whether a rival would make a counter offer. GEA, a German food processing machinery company which announces its results on Monday, refused to rule itself out of the running, although European competition concerns may prove a constraint. Speculation was also rife yesterday about the intentions of FMC, a big US food conglomerate.

Paul Compton of brokers Merrill Lynch suggested there was still a slim chance of a rival offer. "It might not be all over, but I think it probably is", he said.

There was a general welcome from analysts for the Siebe deal, which comes 11 years after it mounted an earlier takeover attempt on APV. Describing it as a "clip on acquisition" which would be integrated with the Foxboro control systems business, Allen Yurko, Siebe's chief executive, said it offered "clear, no nonsense, up-front synergy benefits" which will enhance earnings and enhance shareholder value "right out of the blocks". He said APV's original plan to shed 500 jobs might possibly be increased to as many as 1,000, with most of the losses coming outside the UK and administrative functions. APV's chief executive, Neil French, is being kept on for at least the transition period, but he could be in line for a payoff of around pounds 600,000 if he goes.

APV has been struggling for years and Siebe is now aiming to raise last year's 3.5 per cent margins to 10 per cent over the next two to three years, implying around pounds 50m of cost savings are in prospect. But Mr Yurko said the main benefits would come from cross selling Siebe's Intelligent Automation process control system, which is now close to overtaking Honeywell as the market leader in this sector, through APV's 1,000 strong sales force operating in 40 countries. Foxboro already has around 1,000 sales staff.

APV will give the group a commanding 11 to 12 per cent share of the market for control systems in the food, drink and pharmaceutical industries, well ahead of 9 per cent share held by Tetra-Laval of Sweden. The purchase will aso fill in another piece of Siebe's product portfolio, which already commands number two or number three slots in markets ranging from oil, gas and chemicals, through power and water utilities to pulp and paper.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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

Guru Careers: Stockbroker

£Basic (OTE) + Uncapped Commission: Guru Careers: A Stockbroker (qualified / p...

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Guru Careers: Application Support Analyst / 1st Line Support

£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence