Siebe seals pounds 511m Unitech takeover

Siebe yesterday sealed agreement with rival engineering group Unitech for a pounds 511m takeover. The two sides have been talking since Siebe announced last month it had bought a 25 per cent stake in Unitech from Electrowatt of Switzerland and had an option over the Swiss group's remaining 4.1 per cent holding.

The main offer is 0.804 Siebe shares for every one in Unitech, with a full cash alternative worth 659p a share. Siebe's shares fell 23p to 874p, putting a value just short of 703p on the paper offer. Unitech rose 29p to 703p.

Electrowatt has committed itself to accepting the offer for its remaining holding in Unitech and Siebe has also received acceptances from directors controlling a further 1.2 per cent, giving Siebe control over 30.3 per cent.

Siebe has had to pay significantly more than the 590p a share which it paid for its initial stake, but Allen Yurko, chief executive, dismissed suggestions that they had been forced to overpay to secure board agreement. "Certainly board agreement was significant and important to us. We wanted a growth company, management agreement and to bring on board [Unitech's Japanese subsidiary] without hostility."

But he described the 670p average price for the bid as "very fair". Siebe hopes to retain all the executive members of the Unitech board, led by Peter Curry, chairman and chief executive, and has no present plans to close either the company's Reading headquarters or any of its plants.

The acquisition would not dilute earnings in the first year and would enhance them in following years, Mr Yurko claimed. It would strengthen Siebe's existing business in three strategic areas.

Unitech was a leader in electronic power controls, used inside electrical equipment as sophisticated current transformers. It was "the final peg in the final hole" in the group's existing electronic controls business, where they would now be in all the main markets of the world, he said. Unitech would take the 2 per cent world market share of Siebe's existing Teccor business to around 10 per cent.

Meanwhile, he described Nemic-Lambda, 50.6 per cent controlled by Unitech, as "a brilliant company". Siebe had been looking for years at ways to penetrate the Far Eastern market and this was a backdoor way of doing an acquisition there, he said. "It would have taken five to six years to have built this sort of presence."

Finally, Unitech's heating, ventilating and air conditioning operation was entirely complementary with Siebe's own business in this area. It would reinforce the group's leadership in this market, adding around 3 points to its market share to between 18 and 19 per cent.

Analysts were less enthusiastic about the bid. Sandy Morris of NatWest Markets said: "I can understand where [Unitech] fits in. Their product is an adjunct to everything else [Siebe] does. This allows them to offer a complete electronic controls system." But he questioned the claim that the acquisition would not be dilutive, saying he would have to raise his forecast for Unitech for the 1997-98 year, the first full 12 months with the group, from pounds 64m to pounds 72m, to make the numbers stack up.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
film
Arts and Entertainment
Preening: Johnny Depp in 'Mortdecai'
filmMortdecai becomes actor's fifth consecutive box office bomb
News
peopleWarning - contains a lot of swearing
Travel
travel
Arts and Entertainment
arts + ents
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

Ashdown Group: Client Services Manager - Relationship Management - London

£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Guru Careers: In-House / Internal Recruiter

£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Day In a Page

Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project