Amec may pursue McAlpine link-up

RUSSELL HOTTEN

Amec, the UK contractor, may pursue further merger talks with Alfred McAlpine if it escapes a pounds 360m bid from the Norwegian shipping group Kvaerner.

Sir Alan Cockshaw, Amec's chairman, said the logic of a link-up with McAlpine still made sense and the company would not rule out attempts to negotiate with its UK rival.

Amec yesterday produced its first detailed defence of Kvaerner's pounds 1-a- share bid, pledging to deliver greater value for shareholders after a major overhaul of operations.

Sir Alan said Kvaerner's bid did not take into account Amec's forecast 39 per cent increase in operating profit for the year to 31 December 1995. Takeover rules restrict Amec from making a 1996 profit forecast, though turnover for next year is put at 12 per cent. The order book stands at pounds 2.3bn.

In a letter to shareholders published in the defence document, Peter Mason, chief executive designate, promised a detailed review of operations. "I expect that changes will need to be made to improve profitability and avoid the problems of the past," he said. "I intend to take whatever action is required to ensure that Amec delivers value to shareholders. There will be no sacred cows."

Kvaerner said the comments demonstrated that the company was set for a lengthy shake-up that would delay any returns to shareholders.