Shares in Northern Irish engineering group Powerscreen continued to rise yesterday amid speculation that an offer may be imminent which would take it private.
Merrill Lynch Private Equity Fund is seen as the most likely to make such an offer, according to market sources, while it is understood that a number of Irish banks have been approached about a refinancing package.
Speculation about an imminent takeover was fuelled during the week by the announcement that Quinn Direct, the general insurance company owned by the Sean Quinn Group, had taken a 6 per cent stake in the company. Shares in Powerscreen, which held its annual meeting in London yesterday, closed at 105p sterling, up 7 per cent on the day and up 30 per cent on the week.
A number of British and one Irish venture capital fund are believed to have examined Powerscreen in recent weeks. A number of directors are understood to be supportive of the idea of taking the company private, which would mean buying up its shares and removing its listing from the market.
Merill Lynch is now seen as the most likely to lead such a move. Quinn Direct is not believed by market sources to be involved with any potential bidding consortium and may be hoping to make a trading profit on the shares.
The annual general meeting, which was attended by about 30 people, lasted around 15 minutes and the issue of a takeover was not raised. Shareholders approved motions including the receipt of accounts, the appointment of auditors and the re-appointment of directors but did not ask any questions, a company spokesman said.
Speaking to The Irish Times after the meeting, the company's chief operating officer Mr Hubert Watson said that, while companies were always concerned when large stakes were acquired, management had to get on and manage the business.
He also noted that Powerscreen has had larger shareholders in the past and said that the company's share price, though still undervalued, was beginning to show signs of recovery which would make a takeover more difficult. Mr Watson also said Power screen was trading well and in line with expectations. "Considering the world economy and the climate in Asia which has extended into Latin America and South Africa, for us to be trading at the levels we have been trading at is very good," he said.
He said the £19 million sterling proceeds from the sale of USTC, recently approved by shareholders, should be in the bank next week and would help to reduce Powerscreen's debt to around £24 million from a high of £80 million in January.
Mr Watson said Powerscreen planned to make one more small disposal in North America which it hoped to have completed by Christmas. The annual meeting represented the closing of a chapter after the Matbro difficulties, he said. "We have stabilised the ship. It is anchored in the harbour and now we have got to float it," he said.
