Shares digital

Oil services firm Expro International (EXR) is believed to be the subject of a £1.3 billion private equity bid. Candover Investments is understood to be behind the offer, although it has refused to confirm or deny the rumours. Expro meanwhile says only that it has received a ‘very preliminary’ approach.

The company is the latest in the sector to attract bid interest after another private equity group, First Reserve, successfully pursued Abbot Group at the end of last year. Sondex was also taken out, by a subsidiary of General Electric, in 2007.

Expro’s share price had drifted downwards since the turn of the year but predictably it exploded as soon as the news emerged – up around 35% to trade just over £12, with some analysts expecting the company to hold out for a bid closer to £15 a share. In response to the announcement broker Seymour Pierce has upgraded its recommendation on the stock to ‘buy’ and cites the possibility of a higher bid.

This latest M&A activity in the oil services space has again fuelled speculation of further deals to come. Wood Group (WG.), which released its full-year results this week, says it has received no bid approaches in the last two years and has ruled out getting involved in a bidding war for Expro.

Attention may instead turn to Hunting (HTG) which also looks a tempting prospect. Broker Evolution Securities notes that the company’s energy division is still undervalued by the market, which could attract suitors.

Shares says: The interest in the sector reflects its potential

BUY Hunting

SPECULATIVE BUY Expro International

HOLD Wood Group

by: Tom Sieber