Miners, Amec interest support market.

(From Guardian Unlimited)

There was interest in engineering and project management business Amec today after a tale from down under.

Australian group Downer EDI reportedly said it had made an approach for the company earlier this year but had been rebuffed on price. Bid rumours had surrounded the company in the middle of August. A month earlier Amec had sold its Spie unit - which supplies services to the energy and rail industries - to private equity firm PAI for GBP707m, and the remaining group is worth around GBP1.2bn, compared with Downer’s GBP1bn valuation.

Amec refused to comment beyond saying, “If there had been anything substantive we would have had to have made a statement at that time.” This took some of the froth out of the story, and the company’s shares closed up 2.25p to 375.25p after earlier touching 392p.

Meanwhile one of its investors, Fidelity, announced today it had cut its stake in the company from 8.66% to 7.69%.

On the economic front, the October purchasing managers’ index in the UK showed the fourth decline in the last five months, but this is unlikely to prevent another rate rise next week, economists believe.

Simon Wallace of the Centre for Economic and Business Research said, “[The UK survey] results are unlikely to alter the probable interest rate rise next week. Despite the slowing of manufacturing expansion the sector has now grown consistently for the past fifteen months and the index remains significantly above its historic trend. The inflationary pressures from higher output prices are more likely to concern the Monetary Policy Committee, and may even force the members to start considering a further rates rise early in 2007.”