Takeover scrap for engineering giant heats up

Takeover scrap for engineering giant heats up

A major engineering company has reportedly been the subject of two takeover bids from rival firms in recent days, with the prospect of a deal still looming over the industry. Shares in Kentz have risen by almost 25 per cent day after news of interest in it broke, with fellow London organisation Amec known to be one of those interested in sealing a takeover of the business. Amec is said to have made a bid of between 565p and 580p per share for Kentz, which has been rejected. It is suggested that German construction body M+W has also discussed the possibility of launching a bid for Kentz. However, its approach has also been rebuffed as it is believed it valued the company even lower than Amec did in its offer. Kentz boasts a number of oil, gas and mining infrastructure projects in its portfolio, making it one of the leading companies in its field in the world. It employs about 14,500 people and has a market capitalisation of roughly £700 million. Dougie Youngson of VSA Capital told the Evening Standard: "If a deal was to go ahead at anything less than 700p, we would regard it as a very cheap acquisition." Experts believe such a figure would value Kentz at approximately £820 million in total, some way ahead of the £680 million figure that Amec's bid puts it at. It remains to be seen whether either of the interested parties to date will return to the bidding table with an improved offer that might make a deal more likely. Should a significant takeover occur in the engineering sector, it could be good news for all those who wish to secure a job within it or carry out major infrastructure projects, which can be completed by a newly-strengthened major firm. Negotiations could now continue as speculation over a potential takeover heats up and the engineering sector waits for further news on one of its most significant players.

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