City opposition to Siebe’s £7.6bn merger with BTR is growing amid signs that the US group’s plan to integrate the two companies may be harder than it is admitting.
But analysts concede that the tie-up effectively a takeover at a very low price is more or less a done deal. None expects shareholders to stand in the way.
‘The two companies will have to work hard to sell the idea of this so-called merger to their shareholders, but they [the investors] are not going to turn it down,’ said one analyst last week. ‘There isn’t much of an alternative and unless someone else expresses an interest they’ll vote it through. That doesn’t mean they have to like it, though.’
Siebe chief executive Allen Yurko inadvertently called the deal an acquisition during a session with analysts last week, confirming what many see as an opportunistic move by the US group.
Engineering sector experts believe Yurko may have no more luck than BTR’s chief executive Ian Strachan in turning the group around.
BTR has disposed of £6bn of non-core businesses as it transformed from an unwieldy conglomerate into a more focused engineering group.
However, the company’s shares have failed to keep pace. When Strachan took over in 1995, BTR was worth more than three times the pre-acquisition price of 95p a share last week.
A downbeat note from broker ABN-Amro questioned whether buying BTR will help Siebe overcome slowing growth in many of its core markets.
But other analysts were less scathing, noting that Siebe has bought the company at a bargain price.