Enterprise Shares Jump on Report of 3i Takeover

Shares of Enterprise Plc, a U.K. provider of support services to utilities, had their sharpest gain in three months after the Daily Telegraph said the company had agreed to a 486 million-pound ($949 million) takeover by private-equity firm 3i Group Plc.

The stock rose 48 pence, or 9 percent, to 579 pence, the most since Nov. 8, and was trading at 575 pence as of 9:16 a.m. in London for a market value of 462 million pounds. 3i offered 605 pence a share, the Telegraph said, citing unidentified people familiar with the matter.

Enterprise, whose customers include Thames Water Plc and BT Group Plc, said on Jan. 18 it had rejected as too low a 462 million pound takeover approach from Owen McLaughlin, its chief executive officer, and an unidentified private-equity backer. The 575 pence-a-share cash offer was made on Jan. 12, Leyland, northwest England-based Enterprise said at the time.

``This would be a knockout bid if the rumors are correct,'' said Nicholas Spoliar, an analyst at Bridgewell Securities in London with a ``neutral'' rating on the stock. ``Private equity firms are often prepared to pay a fairly significant premium and they will be attracted by Enterprise's visibility of earnings.''

Calls to Enterprise spokesman Nick Oborne and 3i spokeswoman Ingrid Tighe weren't immediately returned today.

A bid of 605 pence a share would represent a 30 percent premium to Enterprise's share price on Nov. 7, the day before the company first said it had received an unsolicited approach from a private-equity firm and had given permission for McLaughlin and Finance Director Neil Kirkby to explore a management buyout.

Defense Buildings

Enterprise, which along with Carillion Plc is helping to maintain 45,000 U.K. defense ministry buildings, handed the CEO's job to McLaughlin in July, three months after the resignation of previous incumbent Jack McGrory. McLaughlin is also the company's chairman.

Previously called Lancashire Enterprise, the company was spun out of Lancashire County Council in the 1990's and first sold shares to the public in 1995, according to its Web site.

Enterprise made its first acquisition in 2000, buying ARM Service Group Ltd., which had been founded by McLaughlin, for 51 million pounds, according to Bloomberg data.

source:www.bloomberg.com