Found this on iii27 Nov 2012 12:34
Which brings us back to Lamprell. At £200m, the company is worth half a billion less than it was in May.
At GE’s quarterly earnings announcement last month Jeff Immelt, the chief executive, said he was on the hunt for small, strategic acquisitions to fatten its pipeline of contracts.
Lamprell fits the bill. Despite the cost overruns and the indefensible drip-drip approach to revealing them, the company has so far delivered the kit on time.
The chance that customers who have placed new orders worth nearly $1.5 billion (£930m) with it will take their business elsewhere looks low.
Liberum Capital, the broker, said: “With the [shipbuilding] projects nearing completion and the market anticipating the next warning, this may be the last opportunity to acquire shares at good value.”
GE, meanwhile, is bursting with cash. According to analysis by JP Morgan, it has an estimated $42 billion sitting in jurisdictions outside America. Like many of the biggest US companies, it is loath to bring it back home because it will be subject to heavy taxes.
An alternative, of course, is to spend some of the money on deals. Even if Kennedy rights the ship and Lamprell’s shares recover, GE could pay for it with the equivalent of the coppers down the back of the couch.
Nothing is likely to happen until the outside auditors he brought in to get to the bottom of its lax data management systems give a full assessment of just how bad the damage is. The company is also going to have to renegotiate its loan terms. But the Americans are sure to have put in a call already to their favourite British salesman.
End
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