February 20, 2007 / 6:10 AM / 12 years ago

Enterprise in Talks Over $947 Mln Bid from 3i

LONDON (Reuters) - British maintenance and support services firm Enterprise Plc ETR.L is in talks with private equity firm 3i Group Plc over a potential 486-million-pound ($947 million) offer for the firm, it said on Monday, boosting its shares.

The possible 605-pence-a-share offer includes any final dividend for 2006 and is conditional on agreement being reached on a number of factors including due diligence and 3i (III.L) securing financing for the acquisition, Enterprise said in a statement.

“Consequently there can be no certainty that the discussions will result in an offer being made for the company nor the terms of any such offer,” it said.

A source close to the matter told Reuters the acquisition could be agreed in a few weeks after due diligence is carried out.

In January Enterprise rejected a 575p-a-share bid, which sources close to the matter had told Reuters was from 3i.

By 1320 GMT shares in Enterprise were up 9.6 percent at 582p, off a session high of 600p.

Bridgewell Securities said the possible takeover price represented a hefty premium over fair value as it puts the company on a price to earnings ratio of around 17.5 times — a full valuation in its view for a company which is in recovery mode.

Private equity firms, which have tended to avoid the sector due to its low and volatile margins, have shown strong interest in recent months as strong order books and increasing investment and demand for infrastructure space boosted the sector’s cash flow and earnings visibility.

In November project management firm AMEC Plc AMEC.L rejected an approach from private equity firms First Reserve and Texas Pacific [TPG.UL] after it spurned a takeover move by Australian engineering contractor Downer EDI Ltd (DOW.AX) early last year.

Enterprise, whose business ranges from utility to telecoms and public sector maintenance, reported a 22-percent rise in first-half pretax profit in September on revenue of 303 million pounds, up 21 percent.

Close Brothers Corporate Finance Ltd. and Gleacher Shacklock are acting as financial advisers to Enterprise.

Additional reporting by Mathieu Robbins

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