Big offer on the table from US group for UK downhole specialist
US-headquartered conglomerate GE Energy has made an offer to acquire London-listed downhole specialist Sondex for $582 million.
Sondex chief executive Martin Perry said GE's offer stands at $9.27 per share. His company's board is recommending its approval.
The offer is a 36% premium to Sondex's 30 August closing price on the Alternative Investment Market.
Sondex, which has three US offices and eight other offices around the world, said its 500 employees would not be affected by the takeover and the company would form part of a new unit within GE's "optimisation and control (O&C) business".
Perry said: "With GE Energy, we will have greater resources to further develop innovative new technologies and provide an enhanced level of global support to our customers."
"Sondex will be an important addition toGE Energy's portfolio of businesses, complementing our existing Tensor product line," said Brian Palmer, vice president of O&C, for which the acquisition would mark its foreign debut.
Sondex designs, manufactures and sells downhole equipment to enhance recovery from mature oil and gas fields.
Sondex finance chief Chris Wilkes said that he and Perry would be staying with the company and they would urge GE to make additional acquisitions.
"GE buys 100 companies a year it's pretty acquisitive and we want to convince them to spend more money in our space," Wilks said.
He added that Sondex would also look to expand in China, where it has about 10 staff but GE has far more. "We can use GE's resources world-wide to tackle market penetration," he said.
GE's O&C unit generates an annual turnover of about $1 billion while GE Energy's revenues stand at $12 billion.
GE, which also recently acquired Vetco Gray, said it had irrevocable undertakings and non-binding letters of intent in favour of the bid from 44.2% of shareholders.
Wilks said Sondex had originally received two separate approaches including the one from GE and had sounded out other potential buyers before agreeing the 460 pence deal.
"Of the small group we approached, GE was the highest not by a massive margin but still the highest. Will another party that we didn't approach come forward? You never say never but I would be surprised," he said.
By Iain Esau
© Upstream 2007
