Amey set for £400m Anite bid

INFRASTRUCTURE services group Amey is preparing a £400m all-share bid for computer services rival Anite as part of a plan to take it into the blue-chip FTSE 100 index by next year.

Amey had planned an offer at Anite's then market value of 127p a share, giving Anite investors about 37% of the enlarged group. But at this price the offer would no longer succeed, since Anite has risen to 134p, up 1p yesterday. Amey was up 2p at 260p. At these prices the move would create a £1.1bn group.

Amey believes Anite, formerly known as Cray Electronics, will help to make Amey the strongest competitor to market leader Capita. It sees Anite's sales growing from £194m in the year to April 2002 to £223m next year, and its pre-tax profit rising from £27.7m to £33.9m.

Amey believes Anite would provide new capabilities and markets, particularly in travel and Continental Europe. Amey plans to make it into the FTSE 100 index by 2003, by doing less 'blue collar' infrastructure maintenance work and more high-margin business such as computer services.

It also plans further acquisitions. Last year, Amey, currently ranked at 211 in the FTSE 250 index, lost £18m, from a £5m profit.

The proposed bid would reduce Amey's earnings per share by 8.7%, unless the merger produced cost savings of £9.5m a year.

These savings would follow from the elimination of redundant head and regional offices - particularly in the South East - and duplicate computer services operations. It is not clear whether Anite chief executive John Hawkins would remain after the acquisition.