|
Ge stalking amersham Original Source Link: (May no longer be active)
http://edition.cnn.com/2003/BUSINESS/10/09/ge.amersham.reut/http://edition.cnn.com/2003/BUSINESS/10/09/ge.amersham.reut/
GE stalking Amersham
LONDON, England (Reuters) --General Electric Co has made a bid approach to Britain's Amersham Plc and is likely to confirm its interest in the medical equipment maker in the coming days, a source close to the situation said on Thursday.
"An announcement could come as early as tomorrow,'' the source told Reuters.
The Wall Street Journal earlier identified U.S. corporate giant GE as the suitor for Amersham, whose market value leaped on Wednesday after it announced it was in talks with an unnamed company. Both Amersham and GE declined to comment.
Shares in Amersham climbed for the second day running, gaining 6.4 percent to 682 pence by 0908 GMT, valuing the company at about 4.5 billion pounds ($7.50 billion), after gaining more than 16 percent on Wednesday,
Analysts said a GE takeover would make sense, as GE makes medical scanners and Amersham produces contrast agents used in them.
But some thought GE might not be interested in Amersham's life sciences business, which makes equipment to research and manufacture drugs.
"That could complicate the deal, though it doesn't necessarily make it less likely,'' said Navid Malik, an analyst at Williams de Broe, noting that firms such as Millipore Corop might be interested in Amersham's life sciences unit.
Analysts had suggested that Switzerland's Roche Holding AG and U.S. healthcare giant Johnson & Johnson were the most likely candidates to bid for Amersham.
"I think there is still a lot more logic in Amersham ending up in the hands of a company that can use all parts of the business,'' said Panmure analyst Paul Diggle.
GE TARGETS HEALTHCARE
GE is in the midst of overhauling its businesses, which range from television broadcasting to jet engine manufacturing, with an aim to focus on higher growth areas.
The firm made it clear in December that it viewed healthcare as one such field when it agreed to buy Finnish medical equipment group Instrumentarium for 1.75 billion euros ($2.07 billion).
GE already has a research partnership with Amersham dating back to November 2001 to develop tools aimed at detecting early signs of diseases such as cancer and Parkinson's disease.
Analysts at UBS Warburg raised their price target on Amersham shares to 675p from 600p on Thursday, while keeping a "neutral'' investment recommendation on the stock.
ING Financial Markets, however, cut its rating to "sell'' from ``hold'' and said a string of recently failed bid approaches, such as for Irish drugmaker Galen Holdings Plc and Durex condom-maker SSL International Plc, meant the chances of a deal were probably less than 50 percent.
Credit Suisse First Boston raised its price target to 610p from 475p but kept its "underperform'' rating.
JP Morgan is advising GE and Morgan Stanley is advising Amersham, banking sources said. Both investment banks declined to comment.
Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
|
|
