Having got the nod from the Department of Trade & Industry on Wednesday, GEC Siemens Plc wasted no time in making a new bid for Plessey Co Plc, cheekily coming in with a 270 pence a share offer sixpence shy of the Plessey price in the market immediately ahead of the bid. At the meeting called to announce the new bid yesterday afternoon, Lord Weinstock insisted that the offer was final, and that even if a counterbidder were to offer more, GEC Siemens would not raise its price. Indeed the offer announcement says in bold type The Offer is final and will not be increased in any circumstances. The market took this very badly and Plessey’s share price immediately slumped tenpence to 266p. The offer, which values Plessey at about UKP2,000m, is backed up by arguments that Plessey is too small to prosper on its own, and that the acquisitions it has made in the past three years have significantly weakened its balance sheet. In the new carve-up of Plessey, GEC Plc will own 60%, Siemens AG 40% of GEC Plessey Telecommunications Ltd, and GEC will have management control. Plessey’s naval systems and electronics businesses outside North America will be wholly-owned by GEC. Its radar and defence systems businesses, including military communications and the related Australian activities will be wholly-owned by Siemens, but the UK cryptography operations will be transferred to GEC. The government insists that all executives of the defence businesses going to Siemens are British nationals. In North America, GEC will get Sippican Inc and Leigh Instruments Ltd, and will hold 75% of Plessey Electronic Systems Corp, which was acquired by Plessey from Singer Co, with GEC holding 25%. The semiconductor business will be equally owned and present management retained, but Siemens will have management control. Hoskyns Plc will be pleased at the condescension in the statement GEC and Siemens have no objection to Hoskyns maintaining its listing on the Stock Exchange: the pair will hold Plessey’s 75% or so of Hoskyns equally, and suggest that as well as continuing to provide facilities management to the Plessey companies, Hoskyns will be well placed to provide similar services to GEC and Siemens companies. Plessey’s aerospace and engineering businesses will be equally owned by GEC and Siemens and there are no plans to integrate them with the businesses of either company. Plessey’s research facilities at Roke Manor and Caswell will be jointly owned by GEC and Siemens. And the Plessey traffic control equipment unit is to go to Siemens. The blast that emerged from Plessey headquarters in Millbank Tower was deafen ing with chairman Sir John Clark and managing director Stephen Walls rejecting the bid in chorus. The price was totally inadequate, said Sir John. The offer of 270p a share is a major price miscalculation by GEC Siemens, said Walls. We now look forward to… con tinuing our coherent growth strategy as an independent company. Cuts seen – p5.
