Enron Tests Mettle in Bid for Metals Trader
Energy powerhouse Enron decided to test its mettle once again
last week, offering British metals trader MG Plc $4.46 per share
cash offer in its bid to enter a new marketplace. The bid values MG
at $445 million (300 million pounds sterling).
No one was happier about the takeover bid than MG executive
chairman Tom McKeever. He said the sale will allow his London-based
company to grow the business "more aggressively," calling Enron a
"global trading powerhouse." He said that the move will allow MG to
become the "largest, most highly respected, most successful metals
trading business in the world."
The bid offer had been expected, according to analysts. MG is a
leading member of the London Metal Exchange (LME), and yesterday,
its shares rose 8.11%. Enron's Chairman and CEO Kenneth Lay said he
had been watching the global metals market "for several years," and
believed it was time to enter the $120 billion market.
"Our business model, which we have proven in the natural gas and
electricity markets, will give us a tremendous advantage in an
industry that is undergoing fundamental change," Lay said.
This latest acquisition of Enron's may be the last for awhile in
the metals market. Enron Europe CEO and Chairman John Sherriff said
he expected the MG acquisition to grow "organically." The MG metals
web platform is expected to enhance Enron's e-commerce portfolio.
The Enron Online trades about 840 products in 13 countries and in
11 currencies, according to Enron. Since last November when it was
launched, the site has had 114,000 on-line transactions valuing $45
billion, Sherriff said.
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