Takeover talk lifts Amec
UK engineering company Amec was worth £1.4bn (€2bn) today after speculation over a possible takeover approach lifted its share price.
The company, which is well placed to land contracts linked to the 2012 Olympics and the next generation of nuclear power stations, is said to have attracted interest from a private equity bidder.
Reaction to the report in the Sunday Telegraph caused shares in the company to gain by more than 5% to 421p, adding £68m (€101.1m) to its market value.
Market talk suggested Amec merited an offer of around 450p a share - equivalent to £1.5bn (€2.2bn).
As well as possible private equity interest, investors focused on mining and infrastructure group Downer EDI after the Australian group told its shareholders this month that it had initiated discussions with Amec about a merger.
Downer made its move in the summer as it sought to create a “truly global services business”.
Managing director Stephen Gillies said at Downer’s AGM: “Our proposal was principally rejected on price. We do look to the UK for the skills and talent to support a larger and more international capability.”
Charlie Cottam, an analyst at Panmure Gordon stockbrokers, said: “There have been persistent rumours of bids for Amec, which we believe make sense at these levels.
“While Australian company Downer seems only to have proposed a merger, other financial and trade buyers should be able to make a good investment after a 450p bid.”
