Parker Hannifin close to buying Domnick Hunter

Parker Hannifin is expected to proceed with a planned takeover bid for the company. However, analysts have poured scorn on the purchase figure suggesting that the US Company have paid over the odds.

Eaton, whose controls division has its headquarters and research group in the US, had offered €370.5 million for Dominick Hunter on Sept. 20 - €9.1 million more than what it had offered for the British company in August.

Parker Hannifin, supplier of life science products for drug discovery, had bid €364 million - the culmination of two months of wrangling between the two rivals.

Both American groups had made clear their keenness to acquire Domnick Hunter, whose filters are used by the pharmaceutical industry as well as the brewers and the military.

The bulk of Domnick Hunter's business is making filters for the food, drinks, drugs and compressed gases industries, but it is also making inroads into the lucrative defence industry with nuclear, biological and chemical (NBC) protection systems.

For Eaton, securing control of the group would give them a strong foothold in British and European filtration markets. Domnick Hunter employs 1,900 staff worldwide and last year delivered pre-tax profits of £12.8 million. However, the group said in a statement: "Following careful consideration, the board of Eaton Industries has concluded that the price offered by PHIC is in excess of the price which Eaton Industries is prepared to offer."

The bidding for Domnick Hunter has taken several twists and turns in recent weeks, with Parker Hannifin's offer trumped three times by Eaton since the start of August.

After Parker raised its bid to 650 pence a share on Aug 24, Eaton stepped in with a 675 pence offer on Aug 26. Parker then upped its offer to 680 pence on Sept 16 and Eaton trumped that with a 690 pence bid on Sept 20.

But Parker appears to have landed the most significant blow by announcing a higher 700 pence offer the day after. On Sept 26, Parker claimed acceptances for its offer representing 14.9 per cent of Domnick's issued share capital, while Eaton had only about 0.003 per cent.