The Press and Journal (Inverness, Highlands, and Islands)
Finnish rival knocks back Weir bid
Merger proposal hits buffers
Scottish engineer Weir Group’s multibillionpound takeover bid for Finnish rival Metso hit the buffers yesterday.
Helsinki- listed Metso rejected the move, saying it was not in the interest of its shareholders.
It leavesWeir, which has more than 15,000 employees in 70 countries, casting around for other ways to boost its mining equipment business.
The takeover plan ran into trouble as soon as it became public earlier this month, when Finnish state investment fund Solidium – owner of an 11% stake in Metso – said it opposed the idea.
A statement from Metso yesterday said: “The board of directors . . . has come to the unanimous conclusion that this proposal is not in the best interestof shareholders.”
Metso added that it saw no reason to commence talks withWeir, which sells pumps and valves for the mining and oil and gas industries.
A deal would have given Metso shareholders a combined stake of nearly 40% in an enlarged group, worth more than £8.5billion, listed on both the London and Helsinki stock exchanges
Glasgow-basedWeir said there was no certainty it would improve the proposed all-share offer, which valued the other firm at around £3billion.
Weir added: “The proposal was structured to enable the shareholders of both Metso and Weir to share in the very significant value creation that would result from material cost synergies in addition to further revenue synergies expected to be generated through the combination.
“In keeping with the spirit of the merger proposal, Weir had proposed that the combined company would have a significant presence in and a long-term commitment to Finland as well as the UK.
“Weir continues to believe that there is a compelling strategic rationale for bringing the two companies together in a merger structure.”
Recent annual results showed Weir’s pre- tax profits fell 5% to £418million in 2013.
But the group predicted a return to underlying growth this year as chief executive Keith Cochrane hailed growing momentum in its order book following a 12% rise in the second half.
The group’s rejected takeover move comes two years after it withdrew from a bidding war for an Australian miningequipment firm.
Weir said it had matched a £ 243million takeover offer for Ludowici from FLSmidth but decided to back down after its Danish rival increased its bid to more than £265million.