The Vikings have landed in Fremantle

MUSCULAR raiders are coming from as far away as Norway to carry off our comely corporate maidens. Note that their lust list is skewed towards key resource assets and the spookier end of the technology business, rather than poorly managed industrial wallflowers. We have just waved goodbye to a clutch of military satellites, as C&W Optus is bundled off to Singapore.

Now the Oslo-based Odim Hitec group wants to kidnap marine technology company Nautronix, which has been sitting innocently in Fremantle Terrace for donkey’s years, winning an international reputation for its products. It employs 300 staff on three continents and may be better known in San Diego than Sydney.

Nautronix counts the Australian, American, Singaporean and Spanish navies among the customers for its submarine ranging and acoustic gear. The purchase of the US MariPro group this year elevated it to be the world’s biggest supplier of such equipment.

The Nordic 65 cents-a-share offer values the company at $44 million. Long-time chairman Alan Tribe says that is too cheap. The stock market initially seemed to agree, when Nautronix shares bolted to 73 cents, but they have recently run back to 68 cents. The modest bid premium suggests that perhaps nobody is coming to the rescue. Unfortunately, the most likely source of a counter offer is probably overseas.

Nautronix is recognised to be the full bottle on sophisticated underwater marine networks. Tribe and his team were in Aberdeen this week for the Offshore Europe trade show, where they unveiled the company’s NasNet direction finding system for vehicles operating beneath the ocean.

State premier Geoff Gallop happened to be in bonnie Scotland and was able to add some pomp and ceremony. NasNet was developed at a cost of $15 million. It acts like the GPS devices in expensive cars and can operate in very deep water – ideal for oil and gas exploration and military use.

Odim Hitec was formed by the merger of two Norwegian companies last year. The group is a technology supplier to seismic vessels, fibre optic laying ships and remote operated subseas vehicles. It has worked informally with Nautronix before and would love to get NasNet under its belt – not to mention the know-how in the “nuclear listening” facility the Fremantle company has built with hydrophones at a depth of 1,300 metres off Augusta. This kit is able to detect shock waves from nuclear explosions as far away as Pakistan.

The Odim Hitec bid, like all unsought offers, is opportunistic, and has caught Nautronix at a vulnerable time. The company expected to replace an $8.5 milliion loss with a modest $512,000 profit in the year to June 30, but that was obliterated by a prior year tax charge. Now it is poised to turn research and development costs into new contracts and has forecast profits of $5.1 million for this year. Odim Hitec would be getting a bargain buy at only nine times earnings. Nautronix should be able to squeeze some more cash out of them.

The takeover requires FIRB approval. That would be forthcoming, notwithstanding our recent frosty relations with the men from the fiords.

Putting money in your pockets

THE total absence of irrational exuberance on Wall Street has administered a heavy hip and shoulder to the Australian stock market, although that is nothing compared with the bloodletting on Asian bourses. The seven US interest rate cuts have had no discernible effect on the rudderless US economy. Septuagenarian Alan Greenspan may be obliged to seek a less demanding occupation, now that his halo has slipped.

There are two positives for Australia. The greenback is certainly on a weakening trajectory and the Aussie dollar is consequently doing handsprings above 53 cents. We would not want it much higher in the medium term, but the currency does appear to have stabilised. Some stock traders claim that has stimulated a little bond and share buying from the US and Hong Kong.

Secondly, we can forget about a hike in Australian interest rates in the foreseeable future. The money is on certainly one (and possibly two) quarter per cent cuts here by Christmas. That will not quickly sew legs back on the bull market, but it would put a little more in most consumers’ pockets.

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