Counter bid for takeover of Premier Farnell on the cards
THE announcement that Avnet would be acquiring Leeds-based electronics business Premier Farnell for £691m after undercutting its rival Datwyler came a surprise yesterday.
Despite a series of profit warnings and below-expected results, a bidding war seems to have escalated over the company.
Now it has been suggested that the Swiss group may be gearing up for a counter bid.
Investor analysts at AJ Bell said that the market has priced in a revised takeover bid from Datwyler.
Shares in Premier Farnell were trading at 192p at lunchtime today, above the 185p offer price from multi-billion dollar US company Avnet this morning.
The hike in share price suggests that the market is betting on Datwyler to table a new bid, having previously offered 165p in June.
Russ Mould, investment director at AJ Bell said: “Premier Farnell had arguably been a sitting duck following a series of profit warnings caused by falling margins, a dividend cut and competitive pressures. But longer term its track record has been good and that’s what no doubt triggered opportunistic bids by its two rivals.”
Premier Farnell were unable to capitalise on a revenue hike (to £903.9m), and reported pre-tax profits of £29.2m, down from £54.1m in the 2014/15 year.
