Wellstream shares dip after GE takeover rejection

By This Is Money
Updated: 11:26 EDT, 6 October 2010

Newcastle-based oil services firm Wellstream saw shares come under pressure today after it emerged the group rejected a £755m approach from General Electric.

No go: Wellstream rejected American giant GE but more bidders may now come in

American giant GE confirmed its interest in Wellstream but said its 750p-a-share cash proposal was rebuffed.

Wellstream shares dropped as much as 11% as the news dashed investor hopes for a takeover bid at a significant premium, although they later pared back some of the losses, reaching 763.5p (down 2.1% or 16.5p).

GE's revealed price came in short of the 800p a share rumoured in the market.

And the group signalled it may not up its proposed offer despite being 'disappointed' by Wellstream's rebuttal.

'GE is disciplined in its acquisitions, and as such, there can be no certainty that it will take any further action,' it said.

Wellstream's shares have reached as high as 797p in recent weeks after the group revealed last month it had received 'a number of preliminary approaches'.

It is thought that GE's Aberdeen-based oil services arm Vetco Gray made the approach for Wellstream, with other bidders since coming forward. Analysts said news of GE's bid price may now prompt more serious approaches.