Stork’s weak trading statement boosts Candover bid(3)

UK buyout firm Candover’s bid for Dutch industrial group Stork has been boosted by poor second quarter results at the industrial group, as the group’s earnings dropped €35 million.

Stork, the Dutch industrial group, which is the subject of a proposed bid by UK buyout firm Candover, has submitted worse than expected second quarter trading results, boosting the troubled bid by the private equity house.

Candover had made a preliminary offer for Stork at €47 ($65) per share or €1.5 billion. The buyout firm will make a recommended cash offer in mid-August, it said in a statement today.

The bid fell into difficulties, as Marel, the Icelandic food group, in partnership with Icelandic bank Landisbanki and Eyrir Invest, acquired a 19.5 percent blocking stake in the company. Candover needs 80 percent acceptance of its bid for the offer to go forward and has been in talks orchestrated by Stork with all shareholders in the group in an attempt to take forward the deal, according to the buyout firm’s spokesman.

Stork’s Ebit fell to €1 million from €36 million last year based on the company’s balance sheet on 30 July both years. The year on year difference was caused by a €35 million provision for the NH90 helicopter programme which has suffered major delays and has two years until completion with further potential risks, according to the group. 

Chief executive Sjoerd Vollebregt said in a statement: “Operating results this quarter were severely overshadowed by a major provision in connection with considerable risks in the NH90 helicopter programme.”  However, the group’s turnover rose by 4 percent to €555 million and its orders rose by 8 percent to €860 million.

A person close to the bid, said: “The numbers clearly disappoint. With these results the offer is fair.”  Candover’s offer was already a good offer, he said.

Marel was previously interested in the Dutch group’s food systems company but its offer was rejected. Marel supervisory board president and major shareholder Oddur Thordarson told the Dutch newspaper Financieele Dagblad earlier this month that Stork had agreed the division would be a good fit with Marel, but it wanted to buy the Icelandic company rather than break up the conglomerate.

However, Stork’s shareholders would not support this, he said.