Talk of pounds 1.3bn bid by Williams key to leap in Chubb shares
Friday 14 February 1997
Analysts said a bid for the company was not unexpected following disappointing recent results and speculation immediately focused on a handful of potential buyers including Rentokil Initial, Ingersoll-Rand, Tyco and Republic Industries. After strong profits growth following Chubb's demerger from Racal in 1991, the company had recently failed to live up to earlier expectations.
One analyst said the sale was another example of chairman Sir Ernest Harrison's focus on creating shareholder value. Following the successful demerger of Vodafone in the late 1980s from Racal, Sir Ernest had spun off Chubb and installed David Peacock as chief executive with a remit to cut costs. Now that process was largely complete, a disposal of the company was the logical next step, the analyst added.
Chubb, with sales of about pounds 1bn, has an attractive share of the estimated pounds 25bn world-wide market for electronic and physical security. It has faced difficulties, however, in moving from the relatively low-growth markets of the developed economies to regions with more exciting growth prospects such as China, where the security business is starting more or less from scratch.
Williams has interests in the Far East with its security and fire prevention operations, the two legs of its business it plans to grow at the expense of its low-growth building materials division, the UK part of which it recently sold for pounds 303m.
Although analysts thought a bid from Williams would make strong commercial sense, some questioned whether it would want to make such a large acquisition after recent comments suggesting it planned to spend about pounds 500m on infill purchases. Williams has also indicated it would not issue further new shares to finance its ongoing expansion.
Buying Chubb now, however, was viewed as an opportunistic time to make a bid for a company which will not see the benefit of recent acquisitions for up to two years.
Belle Knox: How the porn star student from Duke University became bigger than Justin Bieber
Top 10 most expensive cities in the world: Singapore named costliest place to live – but what about London?
Oscar Pistorius trial: Neighbour feared athlete would use gun that killed his girlfriend Reeva Steenkamp to shoot himself
Oscar Pistorius trial: Athlete 'cheated on me' with Reeva Steenkamp, former girlfriend Samantha Taylor tells Pretoria court
Channel 4 announces two-hour TV show to be broadcast 'Live from Space' later this month
Apple's Tim Cook: Business isn’t just about making profit
Thousands of young people forced to go without food after benefits wrongly stopped under 'draconian' new sanctions regime
Ukraine crisis: New navy chief 'defects' and surrenders Crimean HQ as Putin claims ultranationalists forced intervention
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Ukraine crisis: Russia dismisses '3am ultimatum' as 'total nonsense'
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
- 1 The future of sex: The first female condoms were derided, mistrusted and shunned - but will their modern counterparts catch on?
- 2 South African rhino finally put down after roaming Kruger park for days with horn hacked off and bullet in brain
- 3 Channel 4 announces two-hour TV show to be broadcast 'Live from Space' later this month
- 4 Man stabbed with Legend of Zelda Master Sword in serious condition
- 5 Study suggests that 'gaydars' are real - at least for women
iJobs Money & Business
£12000 per annum: Inspiring Interns: The company works with Tier 1 FTSE 100 Ba...
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...