Weir holds fire over any fresh bid for rival Metso

Charles Berry chairman of the Weir Group. Picture: Robert Perry

Chairing his first annual meeting at Weir, Charles Berry said several shareholders had asked prior to formal proceedings whether the group might increase its offer. There has been speculation that it would have to pay as much as £4.3bn to secure a deal.

Metso would significantly boost the Scots group’s minerals division, the biggest generator of revenues ahead of its oil and gas business and power business. A deal would add “comminution” equipment – machinery to crush rocks – to Weir’s portfolio.

“The answer is that nothing has changed,” Berry said during the afternoon meeting in Glasgow. “On 16 April we made some comments to the market, and nothing has changed since then.

“There is no certainty that we will revise the terms of our proposal.”

Earlier in the day, chief executive Keith Cochrane told analysts the group was pursuing a range of potential acquisitions in all of its divisions, which make pumps and valves for various industrial sectors.

“There are some interesting opportunities out there and in the main I’d have to say that price expectations of sellers are tending to be pretty sensible,” Cochrane, pictured right, said.

His comments followed a trading update, in which the company reported weak demand from mining during the first quarter of this year. Despite this setback, the group confirmed it is on course to return to growth after last year’s fall in both revenues and profits.

It will, however, be hit by adverse currency movements that have already knocked about £50 million off its first-quarter revenues.

Weir operates in about 70 countries, and does the vast majority of its business outside the UK.

Total orders were 7 per cent higher in the first quarter than during the same period last year. Orders for new equipment fell by 2 per cent, but that was offset by a 13 per cent increase in repair and maintenance orders, the update revealed.

The oil and gas division, which has a strong position in the US shale market, enjoyed its best quarter since the end of 2011 with a 33 per cent rise in orders. The power division posted a 5 per cent increase on the previous year.

But mining orders continued to struggle, down 7 per cent on the same period in 2013. Orders for new equipment tumbled by 27 per cent.

All resolutions at today’s AGM were passed by a large majority, including proposals for a final dividend payment of 33.2p, taking the total for the year to 42p per share.

Weir has raised its annual pay-out to shareholders for more than 30 consecutive years.

Its shares ended the day down 56p at 2,634p.