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
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Marketing Services Manager - (communications, testing, DM)

£32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...

Guru Careers: Finance Account Manager

£Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...

Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas