AMEC Considers 800mn Pound Acquisition of Kentz

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Monday, August 19th, 2013
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British engineering giant AMEC is mulling plans for the acquisition of London-listed rival Kentz Corporation for a consideration of around 800 million pounds (approx. AUD$1.36 billion).

City sources told the Financial Mail on Sunday that AMEC was one of several aspiring bidders who had approached Kentz, a constituent stock of the FTSE 250 index, with takeover plans over the past few months.

Other companies who are reported to have shown interest in buying up Kentz include Germany’s M+W Group and Canada’s LNC Lavelin. M+W Group, which is controlled by private Austrian conglomerate Stumpf, is believed to have been the first firm to convey an expression¬† of interest to Kentz, with AMEC subsequently approaching the company at the start of July.

Prompted by these expressions of interest Kentz now plans to go ahead with a “strategic review” – which refers essentially to a sale process.

While shares in Kentz closed up 10p at 476p on Friday, it is believed that the company’s share price could rise to as high as 700 in the event of an acquisition bid, which would put its market capitalization at nearly 820 million pounds.

Kentz provides construction, engineering and procurement services to the extraction and processing operations of some of the world’s leading resource firms

The company has humble origins as a family-owned electrical contractor, which was founded by Michael Francis Kent in Ireland’s South Tipperary in 1919.

Kentz enjoyed thriving growth in the 1970’s and 1980’s on the back of its upgrades to Ireland’s telecommunications network, yet subsequently sustained onerous losses in the early nineties arising from its refurbishment of the Museu Nacional d’Art de Catalunya in Spain.

Malaysia’s Peremba came to the company’s rescue in 1992, before transferring control to Malaysian businessman Tan Sri Mohd Razali Abdul Rahman via his investment vehicle Kerbet., at which point the name of the company was changed to Kertz.

Kertz was first floated on AIM in 2008, and transferred to the main market of the London Stock Exchange two years later.

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