U.S. diversified manufacturer Manitowoc (MTW) has increased its offer for British kitchen equipment maker Enodis (ENO) to 1.08 billion pounds to trump a rival offer. Manitowoc said on Monday that it was offering 294 pence a share for Enodis, topping an agreed bid of 282 pence a share from U.S. rival Illinois Tool Works (ITW). Enodis shares rose 2 percent to 304 pence by 8.05 a.m, according to Reuters.
Enodis, who supplies companies such as Macdonald's (MCD) and Burger King (BKC) with fryers, has just 0.9% of its Market Cap on Loan (%MCOL) to short sellers. Utilisation is low 3.7%. As is typical of a bidder, Manitwoc, who is paying a dividend of on May 30th (as seen by the spikes; the last dividend was only 0.05% yield) has seen an increase in short interest over the past year. In May 2007, 0.6% of its shares were on loan, and this figure has now risen to 6.3% (please click to enlarge chart). Utilisation for Manitwoc is at 17%, so there is still plenty left to borrow if short investors believe that this bid price will grow up. The average Utilisation for the rest of the S&P500 is 7.6%, and for the rest of the North America Capital Goods it is 10%. For those wishing to close out their short positions in Manitwoc, there are 11.3 Days to Cover.
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