ES in oil services group Wellstream jumped 5.8 per cent to 790p yesterday after General Electric confirmed its £800m takeover offer.
GE offered a total of 786p per share for the Newcastle-based firm, six pence above its original offer. The bid leaves Wellstream’s directors in line for a £22m windfall.
Wellstream’s directors own 2.8 per cent of the company’s shares, which GE will buy at a 29.1 per cent premium to the closing price before the news of bid interest. Chairman John Kennedy stands to gain the most, making £18.4m from his 2.3 per cent stake.
Wellstream declined to comment on whether the board members will remain with the company once it is absorbed into GE’s Italy-based oil and gas division.
GE will take over Wellstream’s manufacturing plants in both Newcastle and Niteroi in Brazil.
Wellstream said its advisers, Credit Suisse and Rothschild, believe the deal is fair, and has recommended that shareholders accept the takeover.
“[T]he logic and desire of the GE bid seems greater than the desire or financial resources of other potential bidders, with the possible exception of National Oilwell Varco,” said Keith Morris of Evolution Securities.