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Renishaw RSW Shares,
climbed more than 18% on Tuesday, after the founders of the London-listed high-tech engineering firm told the board they wanted to sell their controlling stake in the company.
President David McMurtry and Non-Executive Chairman John Deer, who are both 80 years old and together own 53% of the Renishaw RNSHF,
said in a statement that they were not “getting any younger” and wanted to secure the future of the FTSE 250 company they created in 1973.
This prompted the board of directors of Renishaw, which manufactures precision measuring equipment used in electronics manufacturing, to initiate a formal sales process for the company.
Renishaw shares, which have nearly doubled in value over the past year, jumped more than 18% to £ 68.60 late Tuesday in London, valuing the company at nearly £ 5bn ( $ 7 billion). The stock is up 16.23% so far this year.
Read: Global deal reaches nearly $ 700 billion so far this year
Renishaw’s board of directors said it intended to seek a buyer who “will respect the company’s unique heritage and culture, its commitment to the local communities in which its business is based and who will enable the company to continue to prosper in the long term. -term. ”He hired UBS UBS,
to drive out a suitor.
AJ Bell analysts said Renishaw shares are already at a high valuation, so any potential suitor would have to pay the “hard dollar” to buy the company.
“You would imagine that an Asian company would be interested in owning Renishaw, but such a buyer may have different opinions on the culture that should prevail,” analysts noted.
Read: Bids of UK companies will become tougher as ministers ban ‘back door’ takeovers of countries like China, Russia and the United States
They added that the sale of Renishaw would be a further blow to the UK market if the company were bought and delisted from the London Stock Exchange LSEG,
“The UK stock market is grappling with an identity problem, with critics saying it lacks exciting companies at the cutting edge of technology and science, especially among larger cap stocks,” said they stated.
The news that Renishaw is going on the block comes weeks after Renesas Electronics 6723 from Japan,
seized UK-listed Apple supplier Dialog Semiconductor 0OLN,
for 4.9 billion euros (5.9 billion dollars).
It was the second time that a UK chipmaker had become the target of foreign bidders, after graphics chip giant Nvidia NVDA,
in September 2020 bought the 9984 from SoftBank Group,
Chip division Arm for $ 40 billion.
Britain’s competition regulator said in January it would open an investigation into Nvidia’s takeover of Arm, including whether, following the takeover, Arm would be “prompted to pull out, raise prices or reduce the quality of its intellectual property. [intellectual property] grant licenses to Nvidia’s competitors. “
Read: Nvidia’s $ 40 billion Arm buyout to be investigated by UK competition regulator
British politicians have repeatedly opposed British companies by foreign bidders in recent years, most notably the PFE of pharmaceutical company Pfizer,
AstraZeneca AZN’s $ 63 billion takeover bid fails,
in 2014, and the successful $ 11.6 billion acquisition of British chocolate maker Cadbury by Kraft KHC,
in 2010.
In November, the government announced plans to step up its powers to block foreign takeovers of British companies if they threaten national security.
Under the National Security and Investment Bill, companies will be required to notify the government of proposed deals in 17 sectors deemed to be of strategic importance. These include civil nuclear, communications, defense, energy, transport and artificial intelligence.
Hargreaves Lansdown analysts said Renishaw – which has manufacturing bases not only in Gloucestershire, where the company is based, as well as factories in Ireland, India, Germany and the United States – appears to want a buyer. that is committed to the communities in which it operates.
“But as we have seen in previous buyouts in the past, promises can be broken… Despite the best of intentions, there is always a risk that could occur, which probably means there will be a great effort. worked together to find the right buyer at the right price, ”analysts said.
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