TT stays silent on Meggitt takeover
Wednesday 08 February 1995
The news propelled Meggitt shares 9p to 73p, though Nicholas Shipp, TT's joint chief executive, would not say whether he planned to launch a takeover bid. "We buy stakes if they have a fair value, but that does not necessarily mean we launch a takeover bid," he said. One analyst believed a bid would have to be pitched at about 80p a share.
Last month Meggitt issued a profits warning, saying it had sacked the management team at its US plastics fabrication business after failure to stop losses. The losses would mean a significant write off, with full-year profits expected to be around £15m. Last year analysts cut profit forecasts from about £25m to £18m after continuing worries about the company.
Ewan Fraser, analyst at James Capel, said: "Obviously Meggitt is very vulnerable to a takeover. TT Group seems to be a very acquisitive company."
TT told Meggitt on Monday that it had built a stake of around 4 per cent. Meggitt took out a section 212 notice to discover the exact size, which was 4.3 per cent.
Terry Twigger, Meggitt's finance director, said the company was undervalued, but declined to say whether the board was making contingency plans against a takeover.
TT Group acquired Dale Electric International last August. That same month, TT raised £51.4m through a rights issue and said it would use the money for future acquisitions. It later sold a 3 per cent stake in Scantronic Holding. Mr Shipp said: "We boughtstakes in the past. We sold some and we used some as a platform for acquisitions." TT shares closed down 4p at 234p.
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