US-based ITT Industries is rumoured to be stalking Scottish-based pumps group Weir with a view to a £600m takeover.
The market speculation follows a recent sharp rise in Weir shares, along with other leading engineers, and suggestions that ITT, which last year bought Weir’s pumps rival Gould, remains keen to expand in this area.
The US group is just the latest in a line of companies to have been publicly linked to Weir by analysts.
The takeover of another rival, David Brown, by US suitor Textron, has fuelled speculation that Weir’s acquisition by a US company might be in the offing.
Chief executive Sir Ron Garrick has rejected the takeover talk, insisting the company was worth more than its share price indicated.
Analysts, however, have described this position as ‘one that is obviously subject to change’, noting that at the current price the company is still extremely cheap.
Weir shares have now climbed from 181p to 203.5p in less than ten days. At Friday’s closing price, Weir was valued at £410m just over half its peak value.
The company recently disclosed that it would look for a major acquisition overseas after it sells its 22.5% stake in railway maintenance business First Engineering.
Weir’s stake in the business could be worth more than £27m if a deal with construction group Amey goes through at the £150m indicative price.
But this acquisitions strategy is unlikely to dim speculation that it is set for takeover, say analysts.