The board of engineering solutions specialist Kentz has unanimously rejected a £680m cash offer from rival AMEC on the grounds it undervalues the company (release).
This morning, AMEC confirmed speculation it made the offer in an attempt to boost its geographic coverage and grow its oil and gas and mining businesses.
The offer of 565p to 580p per share represents a significant premium on the current share price, which closed up two per cent at 475.9p on Friday on rumours of a deal, and has been buoyed ever since an earlier approach by AMEC on 11 July.
The offer wass conditional on a number of factors, including due diligence and the recommendation of the board of Kentz.
Rumours had been circulating that the deal could have been worth up to £800m.
Kentz has a strong and consistent track record of revenue and earnings growth since its IPO in 2008. The Company has strong growth prospects given its substantial order backlog, prospective bidding pipeline and robust balance sheet, together with a clear and realisable strategy to create further shareholder value as a standalone entity.
The Board of Kentz is currently not considering any other offers (including the possible offer from M&W announced earlier today which was at a lower indicative value than the Proposal) (this announcement has been made without the consent of M&W and there can be no certainty that any firm offer will be made nor as to the terms on which any firm offer might be made by M&W) nor is it considering a strategic review with a view to seeking a sale of the Company.
The company said it would keep its shareholders updated of any developments.