Kentz rejects €800m bid

A British oil engineering company has made an approach to buy Clonmel- based Kentz for up to £680m (€797m).

Amec is seeking to expand its energy construction and services business.

The offer at 565p to 580p a share was rejected by Kentz, Amec said yesterday in a statement.

Kentz surged 24% to a record 591p by the close in London, valuing it at £696m. Amec was little changed at 1,085p.

Buying Kentz would give Amec, with a market value of £3.2bn, expertise in the liquefied natural gas business, said Dougie Youngson, an analyst at VSA Capital in London.

“It makes a huge amount of sense for Amec to do such a deal,” Mr Youngson said.

“Amec wants to get more involved in the LNG business and buying Kentz would help it achieve that.”

Kentz said Amec’s offer undervalues the company and it isn’t considering others after rejecting a lower bid from the German M+W Group.

A bid at 700p would probably be taken seriously, said Mr Youngson, who has a buy recommendation on Kentz’s stock.

Amec said buying Kentz would boost its presence in growth areas, expand its range of services and bolster its position in mining, oil and gas.

Chief executive Samir Brikho said on Aug 8 that he sees growth in the North Sea, Gulf of Mexico, and Middle East.

He’s targeting earnings per share of 100p by next year, compared with the 82p last year.

The company must say whether it will make a firm offer for Kentz by 5pm on Sept 16, according to UK trading rules.

Kentz this month won long-term contracts in southern Africa and is also involved with LNG projects in Australia.