Ferranti Plc has ended speculation that it might be a target for STC Plc by announcing an agreed bid for International Signal and Control Group Plc. The terms of the deal – nine new Ferranti shares for every five ISC shares held – value ISC at just under UKP400m at close of trade on Friday […]
Ferranti Plc has ended speculation that it might be a target for STC Plc by announcing an agreed bid for International Signal and Control Group Plc. The terms of the deal – nine new Ferranti shares for every five ISC shares held – value ISC at just under UKP400m at close of trade on Friday and would give the combined group a market capitalisation of over UKP1,000m, effectively putting Ferranti out of the reach of STC. The deal would answer the major City criticism of Ferranti, namely that it is too small to compete internationally. The companies had a total turnover of UKP997.8m for the year to March 31 1987 and made a combined pre-tax profit of UKP85.6m. Explaining the move, Ferranti chairman Sir Derek Alun- Jones said that the two companies were extremely complimentary both in products and geographical pene tration. Ferranti is strong in avionics – airborne radar, navigat ion and displays – command and con- trol, safety and arming, microwave systems and networks, while ISC has a substantial presence in airborne propulsion units and rocketry, ship and ground-based radar, munitions, microwave integrated circuits and modems, and mobile radio. Nearly two-thirds of Ferranti’s UKP628.7m turnover is from the UK while ISC derives most of its UKP369.1m revenue from the US and Italy although it also has major business in the Mid- dle East and Africa. The combined group will derive around 40% of its turnover from the UK, 20% from the US, 20% in continental Europe and 20% elsewhere. 65% of business is in the defence field. The compan ies currently have an order book of over UKP1,500m and a total staff of 26,000. Sir Derek says that the takeover – he insists it is a merg er – has already received the nod of approval from both the UK Ministry of Defence and the US Depart ment of Defense. The City, not unnaturally, reacted favourably to the news marking both up some 12p, Ferranti to 137p and ISC to 231p.