Article from Financial Times (London)
Bid rumours lift Brambles shares
By Neil Hume and Robert Orr
Published: September 23 2006 03:00 | Last updated: September 23 2006 03:00
Brambles Industries, the world's leading supplier of pallets, was one of just two FTSE 100 companies to close higher in a weak London market yesterday.
After heavy trading, shares in the Anglo-Australian group came to rest2.5 per cent higher at 468½p amid talk that the group, best known for its CHEPpallets, could soon find itself on the receiving end of a 600p-a-share bid.
Inevitably, speculation centred on an approach from the private equity industry, which is awash with cash and looking for places to invest.
Even though Brambles is valued at £3bn, traders said the company was a likely target because of the highly cash-generative nature of its business and strong balance sheet. They also noted that the company had not repurchased any shares since it announced full-year results on August 23. If the company was aware of potentially price-sensitive events, it could not buy any shares.
However, analysts said the absence of share purchases might be related to unification of its dual-listed share structure, which is scheduled for December, and not a bid approach. Moreover, they believe yesterday's rise could simply have been a reaction to Brambles' 5 per cent advance in Australia on Thursday night.
BIL
brambles industries limited
