A takeover bid for the engineering consultancy Waterman saw the price of its shares leap today. At 140p-per-share, the agreed cash deal with Japan’s CTI Engineering represented an 85% premium on Waterman’s previous price.
While the deal is yet to be sealed (and there is always a risk it may fail), this development ought to be of interest to onlooking investors. That’s because it comes against the recent run of play for Waterman, whose shares have been generally out of favour and drifting for several months. It begs the question of whether this turn of events could have been predicted…
Since last summer, the market mood has been very much ‘risk on’ towards profitable, growing, small-caps like Waterman. Yet this micro-cap – valued at just £23 million before today’s price rise – failed to ride that wave despite having some appealing features.
Of course, it’s very easy to look for all the plus points after the unpredictable arrival of a takeover bid. But the fact is that for more than a year prior to last autumn, Waterman had one of the strongest combinations of high quality, appealing value and positive momentum in the market.
It was only when its momentum began to…
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