08.06.2006

Manitowoc bids for British company

Enodis Plc has revealed that the Manitowoc company Inc has made a conditional proposal to acquire the company for 210 pence per share in cash. The bid values Enodis at around £975 million.

The Enodis board rejected the proposal after meeting with representatives of Manitowoc’s management team and considering the offer. It is of the opinion that the offer undervalues the company and its prospects.

Enodis, originally known as S&W Berisford, owned kitchen company, Magnet until 2001 when it disposed of the business to concentrate of food equipment, its acquisitions in this area have included Welbilt and the Scotsman Group.

Enodis, had sales in 2005 of £665 million, with a profit after tax of £6.8 million. Its net debt is £79 million.

Terry D. Growcock, Manitowoc's chairman and chief executive officer, said, "The Company is disappointed that Enodis has rejected its indicative proposal. Manitowoc remains committed to identifying and pursuing strategic acquisition opportunities that will enhance its global business enterprise."

“Manitowoc is considering its options with regard to Enodis, and there can be no certainty that an offer will be made nor of the terms relating to such an offer. JPMorgan Cazenove is advising Manitowoc in this matter”.
Vertikal Comment

This is a bold move by Manitowoc, but one which would re balance its business, The Crane group has grown to a point where it represents over 70 percent of the group’s revenues. At the same time the food/refrigeration sector has shrunk with the disposal last November of its domestic fridge business.

Enodis would have increased Manitowoc’s revenues by over 50 percent and would have taken the food business revenues up close to the levels of the crane sector. Manitowoc cold then look at disposing of its loss making shipbuilding business.

Manitowoc is more aware than most that the crane business is highly cyclical.

In the 1980’s it was a strong refrigeration sector that pulled the company through the downturn in the crane market. At one point Manitowoc virtually stopped all standard crane production, If it had not been for its diversified nature the company would most likely not exist today.