UK Indexes Flat; John Wood Sell Engineering Division for $2.8 Billion to GE

Marcus Jacob
14 Feb, 2011
New York City

UK shares surged on the takeover talks and higher commodities prices in London trading. General Electric Company agreed to acquire the well-support division of John Wood Group Plc for $2.8 billion. The benchmark index closed nearly flat.

[R]5:00 London – UK shares surged on the takeover talks and higher commodities prices in London trading. General Electric Company agreed to acquire the well-support division of John Wood Group Plc for $2.8 billion. The benchmark index closed nearly flat.[/R]

Weir Group and Invensys closed up more than 2% after rumors of Siemens making takeover overtures.

123jump.com sources in the market denied any takeover in the near future and Siemens and Weir Group media contact refused to comments on market rumors. Invensys media contact could not be reached in London.

FTSE 100 index closed down 2.8 to 6,060.09 and FTSE All-Share index added 0.19 to 3,144.08.

General Electric Company agreed to acquire the well-support division of John Wood Group Plc for $2.8 billion.

Net proceed are estimated at $2.6 billion and John Wood plans to return $1.7 billion to shareholders and the rest to lower the dent.

The transaction that is expected to close by the end of the year also includes business that supports shale gas extraction with sales of $947 million and operating earnings of $166 million. The company had gross assets of $604.6 million.

Wood Group purchased PSN Ltd for $955 million in December that provided services for brownfield production services which has been merged with the production facilities business.

The group employs 3,800 people and also has a right to discuss business arrangement within the gas turbine sector. GE has agreed to pay $50 million if the deal is not struck.

Rolls-Royce won $2.2 billion order to supply Trent engines to Emirates Air for its new Airbus A350XWB aircraft.

Harvey Nash estimated total revenues for the year to January £425 million and gross of £68 million and net profit before taxes increased 46% to £6 million.

Speedy Hire said sales in the quarter ending in December rose 8.8% despite bad weather and 3.3% contraction in the construction sector.

Stock Movers

Weir Group led the gainers in the FTSE 100 index with a rise of 4.3% to 1,767 pence followed by a rise in Invensys of 2.7% to 349.90 pence and African Barrick Gold of 2.3% to 528 pence.

International Consolidated Airlines Group led the decliners in the FTSE 100 index with a loss of 2.5% to 242.80 pence followed by declines in Resolution Ltd of 1.8% to 268.10 and in International Power of 1.6% to 334 pence.

UBS lowered target price for International Consolidate Airlines Group to 360 pence from 290 pence.

Reed Elsevier Plc and Pearson Plc declined more than 1%.