Bloomberg News

Morgan Crucible Says Takeover Talks End; Shares Fall

October 23, 2006

Morgan Crucible Co., a U.K. supplier of ceramics used to make steel, said it has ended talks with a potential bidder that were first disclosed in August. The shares had their sharpest decline in more than three years.

The company said on Sept. 13 that it was continuing talks with an unidentified party that might lead to a cash offer. Discussions are now over, Windsor, southern England-based Morgan said in a statement today, again without identifying the bidder.

Morgan Crucible in August said net income more than doubled in the six months to July 4 after it cut jobs, shifted production to lower-cost countries and benefited from a pension gain. The Financial Times said Sept. 16 that Credit Suisse's DLJ Merchant Banking Partners private-equity unit was behind the approach and that a bid was imminent. Gavin Sullivan, a spokeswoman for Credit Suisse, would neither confirm nor deny it was the bidder.

``There's a lot to like about Morgan, the company's in much better shape than it was,'' said Nick Webster, an analyst at Numis Securities in London with a ``hold'' rating on the stock. ``There may be someone else opportunistic out there and, if so, I would imagine that it would still be private equity.''

The shares tumbled 22 pence, or 7.8 percent, to 260 pence, the sharpest decline since March 11, 2003. That pared the gain this year to 8.8 percent for a market value of 763 million pounds ($1.43 billion).

To contact the reporters on this story: Brian McGee in London at bmcgee3@bloomberg.net;

To contact the editor responsible for this story: Chris Jasper at cjasper@Bloomberg.net.


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