Weir shares jump 42% in two days on takeover bid talks - Business - News - The Independent

Weir shares jump 42% in two days on takeover bid talks

SHARES IN Weir group, the Scottish pump manufacturer, rose 61.5p to 294.5p yesterday, making a two-day leap of 42 per cent, after the Glasgow- based engineer became the latest engineering company to reveal it has received an unsolicited approach that might lead to a bid.

Last week the shares were trading on a multiple of under 10-times earnings and a discount of 30 per cent to the engineering sector as a whole.

The approach comes just 24 hours after the chairman, Lord Weir, retired and the company appointed Duncan Whyte from Scottish Power as chief executive from 1 June.

The most likely bidders include ITT, the world's largest pump manufacturer, which recently sold its automotive businesses for $3.6bn. ITT is likely to be cash positive even after mounting a $1.1bn stock repurchase. Other possible bidders include IDEX, Flowserve or Textron, which last year bought David Brown's pump business in Huddersfield. ITT in particular would make a good fit, analysts said.

Market sources expect a bid of around 300p, which would value Weir at pounds 600m, but David Larkan, engineering analyst at Albert E Sharp, expects that ITT would have to offer around 350p to mount a realistic knock-out blow.

Sir Ron Garrick, the current chief executive who takes over from Lord Weir as chairman, is expected to put up doughty resistance after spending nearly 20 years in building up the business, which is now one of the few remaining independent Scottish engineering groups and has over 8,000 employees.

Weir itself is a cash-rich company with a strong long-term order book. It has spent pounds 200m over the past four years making small but frequent acquisitions.

Worldwide demand for new equipment is currently slack especially from the oil, mining and marine sectors, but demand for spares and service remains strong and the long-term future is bright.

Analysts expect Weir to make slow but steady progress with profits advancing from pounds 59.3m in 1997 to around pounds 63m in 1998 and pounds 66m plus and earnings of 23.5p a share in 1999.

News
Residents of James Turner Street such as White Dee will have a chance to share their experiences of benefits on a Channel 4 spin-off show
peopleBenefits Street star says mixed-race children were subjected to trolling
Sport
Angel Di Maria
Football
News
Piers Morgan tells Scots they might not have to suffer living on the same island as him if they vote ‘No’ to Scottish Independence
news
Life and Style
techIndian model comes with cricket scores baked in
PROMOTED VIDEO
News
i100Exclusive interview with the British analyst who helped expose Bashar al-Assad's use of Sarin gas
Arts and Entertainment
Keira Knightley and Benedict Cumberbatch star in the Alan Turing biopic The Imitation Game
film
Arts and Entertainment
Rob James-Collier, who plays under-butler Thomas Barrow, admitted to suffering sleepless nights over the Series 5 script
tv'Thomas comes right up to the abyss', says the actor
News
newsIn short, yes
Extras
indybest
News
Denny Miller in 1959 remake of Tarzan, the Ape Man
people
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
BoxingVideo: The incident happened in the very same ring as Tyson-Holyfield II 17 years ago
Life and Style
Jourdan Dunn gave TopShop’s Unique show some added glamour at London Fashion Week
fashion week
News
Groundskeeper Willie has backed Scottish independence in a new video
people
Arts and Entertainment
The Doctor poses the question of whether we are every truly alone in 'Listen'
tvReview: Possibly Steven Moffat's most terrifying episode to date
News
i100
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

SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Senior BA - Insurance **URGENT**

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Training Coordinator / Resource Planner - City, London

£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...

Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

Day In a Page

These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week
The fall of Rome? Cash-strapped Italy accused of selling its soul to the highest bidder

The fall of Rome?

Italy's fears that corporate-sponsored restoration projects will lead to the Disneyfication of its cultural heritage
Glasgow girl made good

Glasgow girl made good

Kelly Macdonald was a waitress when she made Trainspotting. Now she’s taking Manhattan
Sequins ahoy as Strictly Come Dancing takes to the floor once more

Sequins ahoy as Strictly takes to the floor once more

Judy Murray, Frankie Bridge and co paired with dance partners
Wearable trainers and other sporty looks

Wearable trainers and other sporty looks

Alexander Wang pumps it up at New York Fashion Week
The landscape of my imagination

The landscape of my imagination

Author Kate Mosse on the place that taught her to tell stories