Siebe Plc launched a one-for-10 rights issue at 485 pence against a price in the market ahead of the announcement of 565 pence – to raise UKP184.3m net of expenses yesterday, primarily to fund its acquisition of Eckardt AG, a German manufacturer of process automation and control systems based in Stuttgart, and also to refinance Eberle and Schmidt, two other European controls businesses that it acquired earlier this year and to develop these businesses. Any cash left over will be held to take advantage of other infill acquisition opportunities. It’s always the done thing with a rights issue to make encouraging noises about prospects and the dividend – it’s too close to reporting its next set of figures to say anything about these, but it forecast that it would recommend an interim dividend of 3.66 pence a share, an increase of 10% over 1992-93. Initially, Siebe will subscribe for new shares in Eckardt representing 52% of the enlarged voting capital for the equivalent of UKP20m, and has an option, exercisable in October 1994, to acquire all the remaining shares in Eckardt for around UKP179m. If Siebe does not exercise the option, shares in Eckardt held by Siebe will be converted into non-voting preference shares so that Siebe will hold no more than 25% of the voting share capital of Eckardt. Siebe says that Eckardt’s product line and European base will complement its Foxboro Co subsidiary in the eponymous Massachusetts town, as well as giving Eckardt the opportunity to exploit further its controls technology internationally. The shares closed off just tuppence at 563 pence.
