MEDICAL equipment, aero-space and engineering group Smiths Industries has made an agreed #136m takeover bid for the Graseby medical devices and monitoring group.
Chief executive Keith Butler-Wheelhouse had received irrevocable acceptances covering 27% of the equity by Monday evening for the 211p cash offer.
Graseby shares jumped 58p to 207.5p with a counter-bid thought unlikely.
The company is chaired by John Jackson who also holds that position at Ladbroke and was briefly chairman of Caledonian Publishing, owners of The Herald before it was taken over by Scottish Television last autumn.
Analysts were pleased with the move as the Graseby share price has been lacklustre for several years, despite the company having a portfolio of high quality products.
These include bedside volumetric pumps used in hospitals for dispensing drugs such as morphine and which complement the Deltec ambulatory pumps made by Smiths.
Another strategically important product range is the chemical agent monitoring technology which as a result of the Gulf War led to the US military awarding the company a $77m (#47m) contract. This is for gas detection equipment to be fixed to the Abrams tank where Smiths already provides the guidance and positioning technology.
At the interim stage, Graseby increased pre-tax profits by 10.6% to #5.2m after the inclusion of #2.1m of head-office expense. That will disappear under Smiths where finance director Alan Thomson expects the deal to be earnings enhancing in the first year.
There are substantial opportunities for cost-cutting with Graseby having sourced its medical equipment from across the world. No decision has yet been taken as to whether other activities such as the detection of metal or stones in food will be retained or sold off.
Derby day
Derby County yesterday became the latest soccer side to announce its intention to join the stock market after raising #10m through selling a stake to investment management firm Electra Fleming. The Rams plan to float in the next three years and the private equity injection will give the club funds to move towards that goal. Electra Fleming will take a 25% holding in the club under the terms of the deal, the controlling interest still lying with chairman Lionel Pickering.
Ashanti dips
Ghana's Ashanti Goldfields yesterday reported a sharp fall in second-quarter profits, but said it was on track to meet its 1997 production and cost targets. Output increases and further cost reductions should also help results next year, chief financial officer Mark Keatley said. But a lower gold price and an exceptional charge for redundancy costs hit 1997 second-quarter earnings, which fell to $7.7m from $13.4m a year ago. In a move to trim its cost base Ashanti, which is West Africa's largest gold miner, cut the number of jobs at its main Obuasi gold mine by 800 to just below 10,000. This resulted in an exceptional charge of $2.5m.
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