‘Filtronic move may leadtobid’
A TEES stockbroker has claimed a troubled electronics firm, which has a base at Newton Aycliffe, has deliberately devalued itself to stave off growing shareholder discontent and gear up for a potential buy-out.
On May 20 Filtronic plc issued a special dividend of 120p per share to take cash off the balance sheet, sending the share price plummeting from 173p to 57p within hours.
Andrew Priestley, a stockbroker for Middlesbrough-based Redmayne-Bentley, believes the move could stave off “unwelcome bids” from investors looking to absorb Filtronic’s cash into their balance sheet.
But he added that the company’s vastly reduced share price could attract other investors looking for a bargain. On May 30, private equity firm Carlyle Group expressed that it may be interested in acquiring Filtronic, which in February sold off its Tees-based compound semiconductors business to American firm RFMD.
Mr Priestley said: “Shareholders may ask questions if cash is on the balance sheet, but is not being used to increase the dividend or grow the business. An excess of cash may also attract possible predators and Filtronic may have decided to get around this by issuing the special dividend.
The company now seems to be in play as a bid target, although it’s not clear at this stage whether a buy-out will go ahead.”
