Bid target Kentz today promised its shareholders that it will win more lucrative contracts worldwide in the oil and resources sector.
Kentz has already rejected a £680 million indicative offer from Amec and a lower approach from Germany’s M&W, both of whom have until 16 September to come up with firm bids.
“We have had no other approaches and we have made clear that the two we did receive undervalue the business,” said chief executive Chris Brown. “There are no other offers in the house at the moment but if one were to come, we would evaluate it on the same basis.”
Amec offered between 565p and 580p a share, and the shares today dipped 1p to 566p. Brown said that while the Takeover Code prevented him talking specifically about growth prospects or anything verging on a profit forecast, he was “excited” about the future.
He said: “Our current prospects, or work we have specifically bid for, is up 48% at $6 billion [£3.8 billion]. And contrary to some people’s view of the hydrocarbons sector, we are still winning business even in Australia, which is supposedly all over. We have an agile, decentralised model working in 30 countries and opportunities, whatever stage a project is at.”
The firm usually expects to win about a third of the contracts it has bid for. It has hiked the interim dividend by 20% to 6.6 cents, and Brown said that if it did not spend its $219 million cash balance on acquisitions, it would look at returning some of that back to shareholders “probably early next year.” First-half revenues rose by 2% to $775 million with pre-tax profits up 3% at $53 million. Headline profits before tax rose by 8% to $55 million while earnings were up 23% 33.25 cent.
Brown dismissed reports that there has been a falling out between himself and his chairman Tan Sri Razali, who recently sold half his 26% stake at 430p a share, over the bid approaches.
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