Carlyle targets Filtronic

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The private equity giant Carlyle Group yesterday revealed it is working on a bid for Filtronic, sending the shares in the UK electronics group soaring. One analyst predicted that the potential deal could be worth about £66m

The US buyout firm released a statement to the market in the afternoon saying it “is reviewing its options in respect of Filtronic, which could include an offer”. The statement was released after unusual rises in Filtronic’s share price in the morning.

Shares in Filtronic closed 18.17 per cent higher at 75.25p, on news of Carlyle’s interest, but had risen as much as 35 per cent during the day. Filtronic declined to comment on the offer.

Nick James, an analyst at Panmure Gordon, said the move did not come as a surprise, saying the shares looked cheap, and predators would be attracted by its point-to-point communications business. “There is a decent chance of a deal getting done,” he said, forecasting a price of about 90p per share.

Carlyle, which was not already a declared shareholder in Filtronic, is one of the world’s biggest private equity companies. It has a strong tradition of technology investments, and launched Europe Technology Partners fund in 2005, with €222m to invest in emerging companies in Europe.

Adam Steiner, head of research at SVG Investment Managers and a significant shareholder in Filtronic, backed the move, saying the business would “prosper best” under private ownership.