Deals

Amec rejects Texas Pacific Group bid

Yesterday Amec rejected a £1.5 billion bid from Texas Pacific Group and First Reserve Corporation, leading shares to a four-year high.

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Amec, an international construction group, has rejected a £1.5 billion (€2.2 billion; $2.8 billion) bid from private equity investors Texas Pacific Group and First Reserve Corporation, deciding the 450p a share offer was too low.

Amec: waiting for a better offer

Amec said: “The board unanimously rejected the proposal since it significantly undervalued the company and its prospects.”

Following the negative response from Amec, Texas Pacific Group and First Reserve are willing to go hostile, reported UK daily newspaper The Daily Telegraph.  It is reported that the groups will take the unusual step of approaching shareholders directly.

Amec declined to comment on the possibility of further board meetings between itself and the two groups.

Amec is being advised financially by UBS and Linklaters is providing legal assistance.

Morgan Stanley is working as sole adviser to Texas Pacific Group and fellow US buyout firm First Reserve.

Yesterday Amec’s stock rose by 9.8 percent to 438.75 pence, the highest since June 2002.

The approach is the second bid rejected since June.  Amec turned down a reported offer of just below 450 p a share by Australian rival Downer EDI, an infrastructure management company.

The latest bid illustrates recent interest in the infrastructure sector. The infrastructure team of Henderson , the fund manager, launched an improved offer of £950m for UK developer John Laing on Friday , beating an agreed offer from German insurer Allianz.

In September Henderson agreed a £886.9 million takeover of John Laing.

Henderson’s offer of 405p a share cash offer is a premium of 47 per cent to Laing’s share price on September 13, the day before the builder announced it had received a takeover approach. 

Also last week, 3i, Europe’s largest quoted private equity business, announced plans to launch a standalone infrastructure business with a separate fund manager under Michael Queen its former finance director.

In November, STAR Capital Partners sold metal recycling business BUS Group to Spanish waste management company Befesa for €330 million.

In October 2006 a consortium of Credit Suisse, GE Infrastructure and American International Group acquired London City Airport for a reported €750 million.