WS Atkins shares keep rising after activist Elliott confirms stake

The takeover of WS Atkins by Canadian rival may not be signed sealed and delivered quite yet, as US activist hedge fund Elliott Advisors has scooped up a 6.8% stake in the London-listed engineering consultant .

Although Elliott declined to comment on its intentions, it has often used its stakes in companies to encourage management and other shareholders to adjust their thinking.

On Monday the shares closed at 2,113p, 1.6% above the 2,080p recommended offer price from SNC Lavalin as announced on 21 April, and on Tuesday had risen another 7p to 2,120p in the opening 15 minutes after trading began.

"We await developments with interest," said analysts at Peel Hunt.

On announcing the takeover last week, Atkins chairman Allan Cook said that having achieved the strategic target of 8% operating margin, directors believe that the company was "strongly positioned to execute on its growth strategy going forward, underpinned by favourable end-markets trends, a differentiated offering and the benefits of recent growth initiatives" but conceded that the offer from SNC was an "attractive and certain value in cash today".

Since the original announcement on 3 April, analysts at Olivetree said the market has been debating whether there was scope for a competing bid, but the general understanding over the last couple of weeks is that the concept of an interloper was felt to be slim and SNC's structure of the deal "suggests the acquirer thinks this will be a very straightforward deal to consummate".