Weir to Appeal Australian Ruling on FLSMidth’s Bid for Ludowici
Weir Group Plc (WEIR), the world’s biggest maker of pumps for the mining industry, plans to appeal an Australian Takeovers Panel ruling allowing FLSmidth (FLS) & Co. to raise a bid for Ludowici (LDW) Ltd., which Weir is also wants to buy.
Weir wants FLSmidth (FLS) to be held to a statement that it wouldn’t increase its offer for Ludowici under the Australian “truth in takeovers” policy, the Glasgow, Scotland-based manufacturer said in a statement today.
Weir Chief Executive Officer Keith Cochrane declined to comment further on a conference call with reporters today. Weir offered A$10 a share on Feb. 23 for Ludowici, Australia’s largest producer of hydraulic and pneumatic packaging and seals, matching a bid by Valby, Denmark-based FLSmidth. FLSmidth has since raised its offer to A$11 a share.
The U.K. company spent $851 million buying Seaboard Holdings Inc. in November and Novatech LLC in January to expand in the U.S. Acquiring Ludowici would cost another $320 million.
Weir fell as much as 5.8 percent to 2,077 pence, the biggest intraday drop since Jan. 20, and was trading down 1.8 percent at 2,165 pence at 11:47 a.m. after Chris Dyett, an analyst at Investec Plc (INVP), said the manufacturer’s cautious forecast for the second half of 2012 would disappoint investors.
Net income from continuing operations last year jumped 33 percent to 282.1 million pounds ($450 million), or 132.2 pence a share. Earnings beat the average estimate of 268.9 million pounds of nine analysts surveyed by Bloomberg.
“We have a strong order book,” Cochrane said. “We expect to make further good progress in 2012, with results in line with current consensus expectations.”
The development of oil and liquid-rich gas shale formations remains “very attractive,” even with a decline in U.S. gas prices, Cochrane said.
To contact the reporter on this story: Peter Woodifield in Edinburgh at firstname.lastname@example.org
To contact the editor responsible for this story: Colin Keatinge at email@example.com