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04/06/2004
Shares in arms-maker Alvis rise after BAE purchase
Britain's sole armoured vehicle manufacturer Alvis has seen its shares rise dramatically today following news that BAE Systems successfully fought off a bid from US conglomerate General Dynamics.
BAE's late announcement that it would pay £355 million to purchase Alvis saw the company withdraw support for a 280 pence share bid by US giant General Dynamics.
Shares in Alvis jumped almost 14% in brisk trading on Friday to reach 315 pence - though BAE's own shares dipped slightly today as investors were apparently concerned at the scale of the deal.
Commenting on the offer, Mike Turner, Chief Executive of BAE Systems, said: “Alvis is a highly successful business with a major presence in the European land sector. We believe the acquisition of Alvis offers substantial opportunities to build on BAE Systems’ support services strategy in the land sector where the very large equipment base presents opportunities for business growth and cost reduction to the benefit of customer, industry and shareholders alike."
Nicholas Prest, Chairman and Chief Executive of Alvis, said that, in view of the "significant premium" offered by BAE Systems compared to the offer from General Dynamics, the Alvis Board recommended acceptance of the offer.
There had been concern in the industry and among politicians that America, whose massive defence budget in excess of £200 billion a year dominates the market, would develop an effective monopoly in the manufacturing sector.
Armoured vehicle manufacturer Alvis acquired the complementary Vickers Defence Systems business in 2002.
Vickers, latterly Alvis-Vickers, supply the British Army with its Challenger 2 main battle tanks.
(SP)
BAE's late announcement that it would pay £355 million to purchase Alvis saw the company withdraw support for a 280 pence share bid by US giant General Dynamics.
Shares in Alvis jumped almost 14% in brisk trading on Friday to reach 315 pence - though BAE's own shares dipped slightly today as investors were apparently concerned at the scale of the deal.
Commenting on the offer, Mike Turner, Chief Executive of BAE Systems, said: “Alvis is a highly successful business with a major presence in the European land sector. We believe the acquisition of Alvis offers substantial opportunities to build on BAE Systems’ support services strategy in the land sector where the very large equipment base presents opportunities for business growth and cost reduction to the benefit of customer, industry and shareholders alike."
Nicholas Prest, Chairman and Chief Executive of Alvis, said that, in view of the "significant premium" offered by BAE Systems compared to the offer from General Dynamics, the Alvis Board recommended acceptance of the offer.
There had been concern in the industry and among politicians that America, whose massive defence budget in excess of £200 billion a year dominates the market, would develop an effective monopoly in the manufacturing sector.
Armoured vehicle manufacturer Alvis acquired the complementary Vickers Defence Systems business in 2002.
Vickers, latterly Alvis-Vickers, supply the British Army with its Challenger 2 main battle tanks.
(SP)
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