20 May 1999: Recent reports say that it has been a difficult year for glassmaker Pilkington. Early last June, the shares hovered at just under 150p, before a series of problems – including a fall from…
20 May 1999: Recent reports say that it has been a difficult year for glassmaker Pilkington. Early last June, the shares hovered at just under 150p, before a series of problems – including a fall from grace by the range of industrial stocks – pushed the shares to a 15-year low of 50p in January. The shares have rebounded moderately in recent months, as chief executive Paolo Scaroni has embarked on an ag gressive cost-cutting programme. Yesterday, Pilkington closed at 76p, down 1p. Persistent takeover talk has also helped the shares, although it“s difficult to fathom a suitable partner. France“s Saint-Gobain – rumoured as a potential partner earlier in the year – has ruled itself out, the reports said. The overlap between Saint-Gobain“s businesses and those of Pilkington is probably too great to pass the competition authorities, observers say. Any foray from the large privately owned Guardian, based in the US, might face further problems, add the experts, while fellow American PPG has actually been divesting itself of glass businesses. For the medium term, investors will have to make do with the cost savings proposed by Scaroni. Last year he proposed an extension of his original two-year restructuring and analysts believe his primary focus is a restoration of the group“s margins. However, over the longer term, some observers are reluctant to rule out the emergence of a merger partner from outside the industry, perhaps a financial buyer or even a venture capitalist working in conjunction with a company in the industry.