Renishaw ends sales process after proposals disappoint

UK engineering group Renishaw said it was no longer for sale, after it decided that takeover proposals it received were not in the interests of all stakeholders.

The £3.75bn company had been on the block since March, when executive chair Sir David McMurtry and his non-executive deputy John Deer, who together own 53 per cent of the group, said they wanted to sell their majority stake.

In a statement on Wednesday, Renishaw said it had ended the process and its leadership had no intention of selling their shares on the market for the foreseeable future.

“At the start of this process we made it very clear that, with the board, we were focused on ensuring that we find the right new owner for our business,” said McMurtry and Deer in a joint statement.

“Whilst the formal sale process did not result in a new owner for Renishaw, we are satisfied that it ensured a thorough and rigorous process that enabled us to evaluate a wide range of potential buyers,” they added.

As part of the sales process, the majority shareholders — both over 80 years old — told interested buyers to set out how they would meet conditions such as protecting the workforce and suppliers.

The requirements effectively ruled out private equity groups as future stewards of the company, a producer of precision measurement and health equipment.

The pair’s insistence on finding the right owner comes at a time of fractious relations between public and private markets in the UK. A proposed private equity buyout of supermarket chain Wm Morrison, for instance, has raised concerns about the new owner’s intentions on jobs and investment.

Analysts said that Renishaw’s valuation of more than 30 times earnings before interest, tax, depreciation and amortisation would mean a purchase would have been tough for a listed buyer to explain to its shareholders.

“Valuation and management demand . . . were always going to be obstacles for a potential buyer, particularly a publicly listed one,” said Anthony Plom, analyst at Berenberg.

Shares in the group slipped 1 per cent in early trading in London to £50.20, down from £69 when the formal sales process was announced.

Renishaw said that trading had been strong in the final quarter of the financial year ending June 30, and it finished the year with a record order book. 

The engineering company said it expected revenue to be in the range of £562m to £567m and adjusted profit before tax to be in the range of £116m to £121m in the year to June 30.