FTSE 100-listed engineering firm Amec’s takeover approach for smaller peer Kentz risks heading towards a stalemate, as it emerges that both sides are unwilling to make the next move.
Amec is not thought to be willing to increase its offer before the 16 September put-up-or-shut-up deadline unless Kentz can show it can generate greater value, following first-half results that failed to impress.
However, City A.M. now understands that Kentz is not willing to give Amec access to its books unless it puts a higher offer on the table, creating a potential deadlock between the two firms.
Kentz confirmed earlier this month that it had rejected indicative offers from Amec and Germany’s M+W, claiming they undervalued the firm.
Amec’s offer was highest, valuing the company at 565p to 580p per share, equating to £680m.
NFU Mutual, a top 10 shareholder in Kentz, told City A.M that it backs the board’s rejection of the two bids, as the “business continues to trade above market expectations”.
Kentz posted a two per cent rise in revenue to $775.2m (£498.8m) and a 2.9 per cent increase in pre-tax profit to $52.7m in its half-year results earlier this week, but Amec argues that this is mainly due to a profitable Australian contract that runs out in a year and a half.