Amec spurns bidder at secret meeting

RUSSELL HOTTEN

Hostilities between the UK construction group Amec and the Norwegian shipping company Kvaerner deepened yesterday after a secret meeting of senior executives.

Sir Alan Cockshaw, Amec's chairman, is believed to have strongly rebuffed attempts by Kvaerner to reach a recommended deal on its bid, which could be worth up to pounds 375m. However, it was hoped that further meetings would take place today or tomorrow.

As the two sides tried to resolve differences, Kvaerner bought another 1.7 per cent of Amec shares, taking its holding to 17 per cent. Kvaerner has now overtaken UBS as Amec's largest shareholder.

It is thought that at yesterday's meeting Kvaerner tried to persuade Sir Alan to agree a recommended offer for the large number of Amec preference shares. But Sir Alan, just off the plane after a trip to the Middle East, was said to be in no mood to compromise.

Kvaerner's pounds 1-a-share offer for Amec's ordinary capital is worth pounds 202.6m. An offer for the preference shares, worth about pounds 172m, has to be sent out to investors by Monday.

Some analysts have suggested that Amec may be in a position to negotiate slightly better terms for the preference shares, though any substantial difference would not be allowed under takeover rules.

However, as the ordinary share offer has been rejected, Amec believes there is little point in discussing the terms of the preference share offer.

Erik Tonseth, Kvaerner's chief executive, told Sir Alan that it was not the culture of Scandinavian companies to mount hostile bids. But Sir Alan said that the company's action had been hostile throughout, starting with a dawn raid on the shares last week and publication of the offer document just 48 hours later.

Mr Tonseth was back in the UK after a brief return to Norway to talk to analysts, some of whom have been cool on the bid. Mr Tonseth said: "The synergy we see within both oil and gas and engineering is so strong that it defends the price for Amec of one pound per share."

While the price-earnings ratio of 37, based on Amec's expected earnings per share in 1995 of 2.7 pence, could be thought high, it was justified by the synergies and the fact that Kvaerner intended to sell Amec's property and housebuilding arms, he said.

Analysts said Kvaerner's presentation on Tuesday had failed to erase doubts on the specific synergy between the two companies.