||EPS - Basic
||Market Cap (m)
|Oil Equipment Services & Distribution
Real-Time news about Wellstream (London Stock Exchange): 0 recent articles
|spob: GE agrees £800m Wellstream deal
By Sylvia Pfeifer, Energy Editor
December 13 2010
General Electric has agreed to buy Wellstream, the UK oil and gas services group, for approximately £800m as part of an aggressive expansion into energy services.
GE, which has twice been rebuffed by Wellstream, confirmed on Monday it will pay 786p a share, including a special 6p a share dividend, for the UK group.
GE increases dividend in bullish stance - Dec-10.General Electric bullish on finance arm - Dec-08.GE's £755m bid for Wellstream is turned down - Oct-06.GE emerges as mystery bidder for Wellstream - Oct-04.Wellstream soars on bid approaches - Sep-21
GE's previous offer of 750p, valuing Wellstream at £755m, had been rejected as too low by the board of the UK company. GE confirmed it had made that offer in October and said it was "disappointed' it had been rejected.
The agreed deal will end months of pursuit by GE of Wellstream which announced in September it had been the subject of several bid approaches. National Oilwell Varco was among GE's rival suitors.
The offer price represents a 29.1 per cent to Wellstream's closing share price of 609p on September 20, the last business day prior to the UK group's announcement that it had received a number of preliminary approaches.
The price also represents a premium of 53 per cent to Wellstream's average closing price of 514p over the three months to September 20 and is 5.2 per cent above Friday's closing price of 747p.
Wellstream has manufacturing bases in the UK and Brazil and is one of the world's largest suppliers of flexible pipes for the oil and gas sector. One of its main attractions to potential bidders is its exposure to Brazil, which is investing heavily in exploration. Petrobras, the Brazilian energy group, accounts for a substantial part of Wellstream's income.
For GE, the deal will mark its second substantial acquisition in the energy sector in two months and will bring together two former sister companies. Wellstream was owned by Dresser 15 years ago. The Texan maker of gas engines for the energy sector, was bought by GE in October for $3bn. The two are seen as complementary.
John Krenicki, president of GE Energy, said at the time that the Dresser deal was just the latest in a series of acquisitions in the sector. As a result of the purchases, the US conglomerate has doubled its energy revenues in the past five years to about $30.2bn in 2009.
Energy is GE's largest industrial unit and analysts expect it to generate about $31bn of revenues in 2010. Its performance has been sluggish of late as power companies have delayed ordering equipment.
Jeff Immelt, GE's chief executive, has identified infrastructure products as an area to focus on as it scales down its financial services arm and returns to its industrial roots.
GE's share price has failed to follow the recovery in the S&P 500 since the financial crisis. Mr Immelt said GE would increase its quarterly dividend by 17 per cent to 14 cents a share, last week. Shares in GE closed on Friday at $17.72 in New York.|
|wendsworth: Original RNS confirming 'receipt of bid approaches that might/might not...' issued by the Board on 21st September..since then ....!!!!
Aren't there Takeover Panel Rules ref timescales ? Such a situation materially affects the share price and as such surely needs to be regulated?
Am I misinformed ?|
|wendsworth: spob : Noted from the Times this a.m. that Evolution securities also 'likes' Wellstream and sees 'G.E. coming back for a second bite'. No target price mentioned for the broker but the article implied that 800p probably wouldn't be enough. General consensus appears to be that yesterday's RNS was very much all about the negotiating process and that the protaginists will be buying up on any resultant short term weakness in the share price.|
|wendsworth: bigbigdave : Many thanks.
After 'shaking out weak holders' the share price has definitely moved back up in the last 2/3 trading sessions. Reckon someone's got wind of imminent offers.
If the Sunday Times article is soundly based then it looks like the auction will commence at 800p. Should that prove to be the case then I don't see the eventual price being much less than 900p.
As ever ..we'll see!|
|peterbill: Oil services group Wellstream confirmed a number of takeover approaches. It made the statement after a steady rise in its share price recently. Shares in the group have risen by a third since the start of July following more encouraging trading news and appreciation of its presence in the fast developing oil prospects offshore Brazil.|
|mr.oz: another , from sell to buy
Wellstream upgraded to buy from sell at Citigroup, TP raised to 580p from 410p
Citigroup analyst Kenan Najafov says the risk-reward balance on Wellstream has turned favourable after a derating of the oil services stock in anticipation of a weak second half.
A likely recovery from 2011 will be driven primarily by orders offshore Brazil.
Due to the weak outlook outside Brazil, Wellstream has underperformed its sector by 30% and 12% in the last 12 and three months respectively. The stock price assumes no growth in sales or margin post 2012, says Najafov.
'Wellstream is a growth stock in a highly technical industry, set to benefit from a rise in orders in Brazil (Petrobras, OGX and IOCs) coupled with its operational leverage.
'The weak current order intake outside Brazil and lacklustre 2010 performance are already expected and priced in.
'Whether or not a takeover is realistic, the mere possibility of an acquisition could further support the share price.'
Citi's target price of 580p implies a 2012E PE of 11, 'well within its historic range of 5-17'.
Story provided by StockMarketWire.com|
|peterbill: Edison Research e-mailed an update (this afternoon) on WSM where they mention that the share price being buoyed by takeover speculation.
|staddles: You can asume nothing, looking at the cyclical nature of the charts there is no need for an RNS as it could be argued that the share price is moving within normal parameters.|
|cwavecrest: Until we have some positive (or negative )news,I can see the share price ranging between £4.60p and £5.30p. Fluctuation will be driven by performance of FTSE 250 or Oil prices. Any rumours of takeovers would be appreciated too!
Although Wellstream have a good contract in Brazil,there seems little elsewhere
hence the recent "Sells" by brokers.|
i think anyone with a brain would realise that wsm are dependent indirectly on the oil price and the wider global outlook on their success, so a share price drop from £14 to £3.50 can be seen as a reflection of future expectation at wsm.
so, in other words, maybe the "caution" in todays rns is already factored into the share price, as the market has already figured out the wsm puzzle and the share price is a real valuation based on this.|
Wellstream share price data is direct from the London Stock Exchange