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Home > BizTimes Daily > Archives > April 8, 2009
Rockwell shares climb amid acquisition speculation
Published April 8, 2009 - BizTimes Daily
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Rockwell Automation Inc. (ROK) stock shares soared this morning amid speculation that the Milwaukee-based company may be acquired.
Several Internet message boards speculated that Rockwell had received an offer of $32 per share from St. Louis, Mo.-based Emerson Electric Co., a global manufacturer in the controls, electronics and process management sector.
At mid-morning, Rockwell's stock was up by more than $3 per share, as news of the takeover speculation was reported on national wire services.
Rockwell spokesman John Bernaden said he would not confirm or deny that the company had received a buyout offer.
"We do not comment on rumors, especially regarding the potential actions or intent of other companies," he said. "We believe that the highest value for Rockwell Automation shareholders will be realized by Rockwell Automation remaining an independent company and executing our growth and performance strategy."
Rockwell also declared a quarterly dividend of 29 cents per share today, payable on June 10. The company's previous dividend was also 29 cents.
Some of Rockwell's recent actions could be taken as indicators that the company is preparing itself for sale.
In early March, Rockwell announced cutbacks in its global workforce. The company closed one of its manufacturing facilities in Ontario, Canada. On April 1, Rockwell chairman and chief executive officer Keith Nosbusch asked the company's employees to take three unpaid days off per quarter. The company suspended its retirement account contributions in the United States and told employees there will be no bonuses this year. Nosbusch said his own salary will be cut by 20 percent.
Like many global manufacturers, Rockwell has been stung by the current recession. In early February, the company reported $1.18 billion in first quarter 2009 earnings, an 11-percent decline from the first quarter of 2008. The company's fiscal first quarter net income was 81 cents per share, down from $1.04 per share in the first quarter of 2008.
"We expect the market environment in 2009 to be very difficult," Nosbusch said at the time. "The global recession has grown deeper and wider than we originally anticipated. Key economic indicators and projections continue to weaken and we are seeing a significant deceleration in customer demand."
