NFU MUTUAL, a top 10 shareholder in engineering and construction firm Kentz, yesterday backed the board’s rejection of two takeover bids, agreeing the offers undervalued the company.
FTSE 250-listed Kentz, which this week unveiled an increase in first-half revenue and profit, rejected indicative offers from larger rival Amec and Germany’s M+W earlier in August. Amec’s offer was highest, valuing the company at 565p to 580p per share, equating to £680m.
“The Kentz results again demonstrate that this business continues to trade above market expectations,” Nigel Yates, UK equity fund manager at NFU Mutual – which began life providing cover for members of the National Farmers’ Union, told City A.M.“We concur with management that the current indicated offer level is below the value that we feel the business is worth.”
It is understood that Amec is not willing to increase its offer before the 16 September put-up-or-shut-up deadline unless Kentz can show that it can generate greater value. Kentz’s shares closed 0.8 per cent higher at 569.50p yesterday, at the lower end of the range offered by Amec.