Weir drops offer for Ludowici

 
Marion Dakers
WEIR shares jumped 2.6 per cent yesterday after it ended its pursuit of Australian machinery maker Ludowici.

The FTSE 100 engineering group, which last month had its A$10 a share bid trumped by Danish rival FLSmidth, said yesterday it would make no further offer and had withdrawn from the race.

Its offer lapsed in February while the Australian regulators were examining FLSmidth’s offer.

FLSmidth last week got clearance for its A$324m (£217m) or A$11 a share offer, despite its chief executive pledging to not raise its initial bid in January before then hiking it by more than 50 per cent.

Weir had asked the watchdogs to look at his comments, as under Australian law a company that declares a bid final can be held to that statement and prevented from raising its offer.

Weir chief executive Keith Cochrane said yesterday: “Whilst Ludowici represented an attractive opportunity to expand our market leading Australian business, our focus in any acquisition is to create value for Weir shareholders.

“A materially higher offer would not have met the rigorous financial criteria which we apply to all acquisitions.”

FLSmidth and Weir have been attracted to Ludowici, which makes coal centrifuges and other mining equipment, by its exposure to Australia’s fast-growing coal and iron ore mining sectors.