Renishaw shares soar 18% as engineer goes up for sale

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Renishaw RSW shares, + 18.97%, soared more than 18% on Tuesday, after the founders of the London-listed high-tech engineering company told the board they wanted to sell their majority stake in the business. . Chairman David McMurtry and Non-Executive Chairman John Deer, who are in their 80s and together and own 53% of Renishaw RNSHF, + 14.39%, said in a statement that they are not “getting younger” and want to secure the future. of the FTSE 250 Company that they established in 1973.

That prompted the board of Renishaw, which makes precision measurement equipment used in electronics manufacturing, to initiate a formal process of selling the company. Renishaw shares, which have nearly doubled in value over the past year, rose more than 18% to £ 68.60 in Tuesday’s London trading, valuing the company at nearly £ 5bn (£ 7bn). Dollars). The stock is up 16.23% so far this year. Read: Global deal soars to nearly $ 700 billion so far this year Renishaw’s board said it intends to seek a buyer who “respects the unique heritage and culture of the business, its commitment to local communities on which its operations are based, and which will allow the Company to continue to prosper in the long term ”. Has hired UBS UBS, + 1.27% to search for a suitor. Analysts at AJ Bell said Renishaw’s stock is already highly valued, so any potential suitor would have to pay a “higher dollar” to buy the company. “One could imagine that an Asian company would be interested in owning Renishaw, but such a buyer may have different views on which culture should prevail,” the analysts noted. Read: Offers to buy UK companies get tougher as ministers close ‘back door’ acquisitions of countries like China, Russia and the US They added that the sale of Renishaw would be yet another blow to the UK market if the company is bought and delisted. of the London Stock Exchange LSEG ,. “The UK stock market is struggling with an identity problem with critics saying it lacks interesting companies at the forefront of technology and science, particularly among larger-cap stocks,” they said. The news that Renishaw will enter the block comes just weeks after Japan’s Renesas Electronics 6723, + 1.31% bought UK-listed Apple supplier Dialog Semiconductor 0OLN, -0.23% for € 4.9 billion ($ 5.9 billion). That was the second time a UK chipmaker has become the target of foreign bidders, after graphics chip giant Nvidia NVDA, -3.07% in September 2020, bought Arm’s chip division from SoftBank Group 9984, -0.53% for $ 40 billion. The UK’s competition regulator said in January that it would launch an investigation into Nvidia’s acquisition of Arm, which will include whether, after the acquisition, Arm will have an “incentive to withdraw, increase prices or reduce the quality of its intellectual property”. [intellectual property] licensing services to Nvidia’s rivals. “Read: Nvidia’s $ 40 billion acquisition of Arm will be investigated by the UK competition regulator. UK politicians have opposed multiple acquisitions of UK companies by foreign bidders in recent years, including PFizer’s PFE, -0.25% failed to bid for $ 63 billion to buy AstraZeneca AZN. -1.43% in 2014, and Kraft KHC’s successful $ 11.6 billion acquisition of British chocolate maker Cadbury, + 0.86% in 2010. In November, the government announced plans to tighten its powers to block foreign takeovers of UK companies. , if they threaten national security. According to the Investment and National Security Bill, companies must notify the government of proposed agreements in 17 sectors considered of strategic importance. They are nuclear civil, communications, defense, energy, transportation and artificial intelligence. Hargreaves Lansdown analysts said Renishaw, which has manufacturing bases not just in Gloucestershire, where the company is based, as well as plants in Ireland, India, Germany and the US, appears to want a buyer who will commit to the communities in which it operates. Opera. “But as we’ve seen in previous acquisitions in the past, promises can be broken … Despite the best of intentions, there is always the risk of it happening, which probably means there will be a very concerted effort to find the right buyer. in the market. right price, ”analysts said.