News blog
Mount Engineering
- BY: Andrew Hore |
- POSTED: 27/09/2010 |
It appears likely that there will be a bid battle for Mount Engineering, following a subsidiary of Copper Industries admission that it is considering a rival bid of at least 78p a share.
Cooper Safety hopes it can gain the agreement of Mount’s board and shareholders for its bid. Any bid is subject to due diligence, which should be complete by the end of the week.
Mount’s board is currently recommending a 70p a share bid from AIM-quoted Redhall. If they withdraw their recommendation then Mount will have to pay the equivalent of 1% of the £16.4m bid to Redhall as an inducement fee.
Redhall wants to increase its exposure to the oil and gas sector through the acquisition and Mount should also help the company increase its operating margin.
Mount was set up as a shell to take over CISX-quoted engineering company Mount (York) Ltd in a deal worth £10.85m. Shareholders were offered 70p cash per share or one new Mount share. Mount raised £12.5m at 70p a share when it joined Aim on 6 July 2007.
Mount reported a decline in 2010 interim revenues from £5m to £4.63m. Pre-tax profit fell from £1.42m to £1.19m. Mount had net cash of £2.42m at the end of June 2010.
Asian and European trading has been weak bit the Middle East and North America have been more resilient. Second half trading has continued in the same vein.
The Redhall bid values Mount at less than nine times 2009 earnings and even the potential Cooper bid is at less than 10 times historic earnings.
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