Weir shares jump 42% in two days on takeover bid talks
Wednesday 03 February 1999
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.
- 1 Migrant crisis: Greek soldier saved 20 people singlehandedly off Rhodes beach
- 2 Sofyen Belamouadden murder: The inside story of a crime that horrified Britain
- 3 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 4 Aaron and Melissa Klein: Oregon anti-gay bakers ordered to pay $135,000 after refusing to make cake for same-sex wedding
- 5 UK weather: Britain braced for snow as arctic air mass moves in
Migrant crisis: Greek soldier saved 20 people singlehandedly off Rhodes beach
Ian Brady: Moors murderer announces his support for Ukip and the SNP
Aaron and Melissa Klein: Oregon anti-gay bakers ordered to pay $135,000 after refusing to make cake for same-sex wedding
UK weather: Britain braced for snow as arctic air mass moves in
Bali Nine executions in Indonesia: Death row British grandmother Lindsay Sandiford says she 'just wants to get it over with'
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
General Election 2015: Britain would become a 'communist dictatorship' under Ed Miliband and Nicola Sturgeon, claims wife of Michael Gove
iJobs Money & Business
£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...
£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...