Energy service firm Wellstream saw its shares come under pressure yesterday after it emerged the group rejected a £755million approach from US giant General Electric (GE).
It is thought GE’s Aberdeen-based Vetco Gray subsidiary made the 750p-a-share cash offer, with GE revealing only that an approach had been rebuffed.
Wellstream shares fell as much as 11% as the news dashed investor hopes for a takeover bid at a significant premium, although they pared back some of the losses later to end the day down just 19p at 761p.
GE’s offer came in short of the 800p a share rumoured in the market. The US group signalled it may not put in a higher bid despite being “disappointed” by Wellstream’s rebuttal. It said: “GE is disciplined in its acquisitions and as such, there can be no certainty that it will take any further action.”
Wellstream’s shares have reached as high as 797p in recent weeks after the group revealed last month it had received “preliminary approaches”.
Analysts said news of GE’s bid price may now prompt more serious offers.
Keith Morris at Evolution Securities said: “GE’s approach looks a tad cheeky in our view and . . . another suitor may break cover now that GE has laid its cards on the table and indicated that 750p is the upper end of its price range.”
Newcastle-based Wellstream employs more than 850 staff worldwide.
It has been listed on the Stock Exchange since 2007 but has spent much of its history under US ownership.
The firm was bought by Dresser Industries in 1995 and became part of US giant Halliburton in a merger before being acquired, in 2003, by private equity.