Amec, a UK oil engineering company, has made an approach to buy Clonmel-founded company Kentz for as much as £680 million (€800 million) to expand its energy construction and services business. The offer, at 565 to 580 pence a share, was rejected by Kentz, Amec said in a statement in London today.
London-listed Kentz surged 26 per cent today to a record 600 pence, giving the company a market value of £705 million.
“Based on publicly available information, Amec believes the proposed offer represents a highly attractive opportunity for Kentz and its shareholders,” Amec said.
Kentz, which started life as a local electrical contractor in Clonmel, Co. Tipperary, was restructured in 1994 with Hugh O'Donnell, then chief executive, later bringing it public in London. Today, under the stewardship of Christian Brown, it employs 14,500 people across 30 countries .
It is understood that Kentz has received interest from several potential buyers. Amec, with a market value of £3.2 billion, said it remains disciplined in its acquisitions and that conditions would have to be met before it makes a firm offer. Amec fell 0.8 per cent to 1,075 pence.
Kentz said in a separate statement that Amec’s offer undervalues the company and that it’s not considering any other offers. A bid from M+W Group was lower and has also been rejected, it said.
Amec said buying Kentz would increase its presence in growth areas, expand its range of services and bolster the company's position in the mining, oil and gas markets. Amec chief executive officer Samir Brikho sees growth in the North Sea, the Gulf of Mexico, and the Middle East. He's targeting earnings per share of 100 pence next year, compared with 82 pence last year. Amec must say whether or not it will make a firm offer for Kentz by 5 p.m. on September 16th, according to UK trading rules.
(Additional reporting: Bloomberg)
