Second potential bid for Amco evaporates

Amco Corporation’s future looks to have has settled down as last as the group’s second potential bidder has gone away.

Amco told the Stock Exchange this afternoon that “early stage discussions have terminated and no offer is anticipated”.

Interest in shifting Amco’s ownership first surfaced last August when the management team put its hand up, saying it was interested in staging an mbo. That possibility ended in October.

The mbo’s offer was pitched at 275p. News of it triggered an 11% fall in Amco’s share price to 312p.

Little is known about the second bid as the company has kept details under strict wraps.

Amco is usually prompt with its announcement of annual results. They are expected in early March. It is known that the first half’s trading was strong and it is reported by the group’s housebroker that in the second half “profits will be satisfactory”.

The two directors who made the mbo move were Ian Swire, finance director, and David Jackson, commercial director. Their offer valued the £130m-a-year turnover construction group at £36m.

Amco’s shares are “illiquid” – a financial expression to indicate that only a limited proportion of them trade freely on the Stock Exchange. In Amco’s case, this is because 49.9% of all the 13m shares are held by Amco Investments, a trust for the founder’s family. The trust was thought to have been fundamentally supportive of the mbo move.