Belfast Telegraph

£159m takeover attempt for Belfast firm Andor imminent as other suitors expected to enter bidding

By Clare Weir

A £159m takeover attempt on one of Northern Ireland's top companies could "flush out" other major international bidders, analysts have predicted.

Oxford Instruments – a spinout of the physics department of Oxford University – announced in its half-year statement that it had made a bid proposal for Belfast-based Andor Technology and had been hoping for a response by November 11.

However, the Northern Ireland company has called the announcement "premature" and "unhelpful" given ongoing talks between the two companies, intimating the bid undervalued the firm.

Andor manufactures scientific imaging cameras and products used in medical research into heart disease, cancers, Alzheimer's and Parkinson's disease.

The company, which itself spun out from Queen's University, employs over 300 people in Belfast, Japan, China and the USA and reported a turnover of £58.3m and a pre-tax profit of £8.9m last year.

Oxford Instruments, which designs and manufactures tools for research and industry, said on Tuesday that it planned to offer 500p a share in cash for Andor to gain its expertise in scientific digital cameras – around 25% above Andor's closing share price on Monday.

Andor said it first received an indicative cash offer from Oxford Instruments on July 9 this year.

Subsequent discussions and multiple meetings have resulted in a 19% increase in the indicative cash offer price per share to 500p, during which time Andor's share price has increased by over 30%.

Oxford Instruments, which made its latest offer on November 8, has said it intends to make a recommended firm takeover offer on December 2.

A spokesman for Andor said: "The board of Andor is disappointed that, having only made the indicative proposal on November 8, Oxford Instruments has chosen to make (an) announcement, which the board of Andor considers to be premature and unhelpful in light of ongoing discussions.

"Given the level of uncertainty and conditionality, the board of Andor felt that it could not properly consider the proposal, but it did confirm to Oxford Instruments that it remained willing to continue discussions to explore whether a definitive, acceptable offer might be found that was in the interests of Andor shareholders."

Speaking to the Belfast Telegraph, Kevin Boyd, group financial officer at Oxford Instruments, denied that the announcement had been unhelpful.

"In fact, I think it has been useful as now that it is in the open it will allow Andor to talk to its shareholders," he said.

"Andor and indeed the sector has grown in the last few years. Andor has shown very good growth.

"It is a relatively small company and we feel we could help the firms reach into markets like India, China and Japan which are becoming ever larger consumers of medical and scientific products," he said.

Company chief executive Jonathan Flint added: "Oxford Instruments started out as a small-scale company 50 years ago and has had a lot of interaction with and admiration for Andor in recent years.

"We share a similar customer base and these really advanced sciences present huge market opportunities. We feel Andor is a very good fit with the objectives of Oxford Instruments," he said.

Analyst Raymond Greaves from WH Ireland said Andor had been vulnerable to a takeover bid for some time.

"The company has world-leading technology and a world-leading market position and a fragmented shareholder base," he said.

"Further, the shares have had a turbulent ride this year as a result of difficult end markets. Despite this, the company remains very cash generative and has circa £22m in cash on the balance sheet.

"We would not be surprised if the Oxford Instruments announcement flushes out other bidders for Andor. Companies like Andor are rarely available and we can think of several large industrial technology companies that might find Andor attractive.

"If a counter bidder emerges, we feel that 600p and above would be needed to consummate a deal."

Adam Steiner and Stuart Widdowson of SVG Investment Managers and the managers of Strategic Equity Capital plc, said that Andor is a "unique asset" and the firm should reject the initial offer.

"We do not believe that Oxford Instruments' bid premium reflects the quality or long-term earnings growth potential," they said.

"There is a risk the company is sold at a price which could look like a bargain in the medium term.

"The proposed bid from Oxford appears a good deal for Oxford shareholders. We would expect additional interest in Andor from overseas trade buyers who see this as a very rare opportunity to acquire a business of this quality."

The roads to success as market leaders

Andor was set up in 1989 when it spun out of Queen's University in Belfast, and now employs over 300 people in 16 offices worldwide, distributing to 10,000 customers in 55 countries, making scientific digital cameras.

The founders of Andor, working in the physics department of the institution, found the cameras then available were inadequate for their demanding applications, so developed their own.

Soon the cameras were being requested by researchers in other departments in Queen's and other universities, and the company was formed.

The firm was admitted to AIM, the London Stock Exchange's Alternative Investment Market for smaller, growing companies in 2004.

In 2009 Andor acquired Bitplane AG of Zurich in Switzerland and a year later took over Photonic Instruments, USA.

Just last month, Andor purchased Spectral Applied Research in Toronto for £6.8m and two weeks later paid £2.32m for Apogee Imaging Systems in California.

The firm also announced two contracts with universities in Moscow in July.


Oxford Instruments, founded in 1959, invented the world's first superconducting magnet. It has a global distribution and support network, employs over 2,000 people worldwide, and has over 25 offices and factories in Europe, the USA, China and Japan.

The company develops products and technology for low-temperature and high-magnetic field environments, X-ray, electron and optical-based metrology, nuclear magnetic resonance and advanced semi-conductor processing.

Sir Martin Wood founded the company with his wife Audrey, starting in his garden shed in Northmoor Road, Oxford, before moving to an abandoned slaughterhouse in North Oxford.

By the early 60s, Wood was one of a handful of experts in the fledgling science of superconducting magnets, and Oxford Instruments pioneered the development of magnetic resonance imaging (MRI).

Oxford Instruments is still a world leader in superconducting magnet technology and has been awarded 13 Queen's Awards for innovation, exports and technology.

Last month Oxford Instruments signed a contract with CERN as part of an upgrade of the Large Hadron Collider (LHC).

Belfast Telegraph

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