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Engineer Smiths climbs on talk of possible French deal

Discussion in 'Market News' started by Lily, Mar 21, 2016.

  1. Lily

    Lily Forum Member

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    Reports suggest conglomerate could be interested in £470m detection business

    Reports that engineering group Smiths could be interested in a near £500m deal in France has given a boost to the business.

    On their first day after being demoted from the FTSE 100 to the 250 index, Smiths’ shares have climbed 11p to £11.17 on talk it could pay £470m for the Morpho security business put up for sale by owner Safran. Analysts at Stifel said:

    The Sunday Times yesterday reported that Smiths is bidding for the detection business of Safran’s Morpho security unit, and suggested a purchase price of £470m. Safran last week confirmed that this business was for sale, and that it was in discussions with a number of parties.

    We believe it is likely that Smiths is interested, given the significant market position of Morpho and the complementary mix of technologies (Morpho in tomography, Smiths in X-ray). Should this transaction take place, we believe that it would be an attractive step, securing clear global leadership for Smiths in a detection market seeing a resumption of growth, and in which Smiths appears to have resolved its own performance issues.

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