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Deals worth £2.5bn on Merger Monday

By Rob Davies for the Daily Mail
Updated: 02:49 EDT, 14 December 2010

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The takeover market sprang dramatically back to life on Merger Monday, as £2.5bn worth of deals were unveiled in one fell swoop.

Stock Market Financial Trading Screen in Green - Buy

Market magic: Signs of mergers and acquisitions sector returning to health

British oil services group Wellstream (up 43p to 790p) accepted an offer from US titan General Electric at 780p per share, plus a 6p special dividend, valuing the company at £793m.

Fellow energy services firm Wood Group (up 32.8p to 521p) flew the flag for British predators, snapping up oil rig servicing group PSN in a deal worth nearly £607m.

Lemsip to Cillit Bang firm Reckitt Benckiser (up 64p to 3573p) continued its shopping spree, unveiling a £460m deal for India's Paras Pharmaceuticals just weeks after paying £2.5bn for Durex condoms maker SSL.

Specialist chemicals company Yule Catto joined the party with a £376m deal for German latex firm PolymerLatex, while pharmaceuticals giant Glaxo SmithKline (up 3p to 1253p) paid £162m for protein drinks maker Maxinutrition.

And shares in oil explorer Regal Petroleum gained 1.5p to 25.75p after the company said it had accepted a £77m offer from Ukraine's Energees Management Limited.

The value of deals announced on the same day reached nearly £2.5bn, in a sign that the mergers and acquisitions market is returning to health.

Takeover activity has been sporadic as the world recovers from the financial crisis when companies hoarded cash.

The Footsie jumped nearly 48 points to 5860.75.

GE's acquisition of Wellstream has been driven by a desire to cash in on the burgeoning oil business in Brazil, where huge multi-billion barrel reserves have been discovered in deep waters off the coast. The sale will hand chief executive John Kennedy an immediate £18m windfall, based on his stake of more than 2% of the company. The firm's remaining directors will share around £4m between them.

The weakness of the pound has made UK firms attractive to foreign predators but British companies yesterday were also out shopping, both at home and abroad. Wood's deal for PSN, which maintains and upgrades oil rigs for firms such as Shell, will see it lay out £607m.

Specialist chemical company Yule Catto is spending £376m on a takeover of German latex maker PolymerLatex.

The group, based in Essex, is financing the deal through a rights issue with four new shares priced at 116p for every three shares already owned, aimed at raising £225m.

Yule Catto (up 30p to 290p) is currently owned by private equity group TowerBrook Partners, which also owns celebrity shoe shop Jimmy Choo.

Bid bonanza
• GE to buy Wellstream for £793m
• Wood Group in £607m deal for PSN
• Reckitt Benckiser pays £460m for Paras
• Yule Catto spends £376m on PolymerLatex
• Regal Petroleum accepts £77m bid from Energees
• GlaxoSmithKline pays £162m for Maxinutrition

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