I bought into these yesterday and they are rising steadily. Main market listing with results in August and the market seems to like them. They are in the rapid growth oil and gas support area.

Faint rumours of a t/o approach yesterday.

good call by Citigroup!
volume today is usefully 2x norm, though whether there is actually a bid in the offing remains to be seen
no, i wasn't remotely smart enough to buy below 540, but am more than happy to have bought at 576, well into the recovery phase

Allegedly Prysmian is interested (formerly Pirelli Cables).
To be fair to Citigroup, they had not factored in the t/o element, which is the reason for the current level of the sp. If the rumour is solidly quashed, I would expect the sp to fall to it's normal trading range.

Broker note from Evolution today:
"We have long believed that Wellstream (WSM) is a prime M&A target for subsea players looking for high tech flexible pipe technology. Yesterday the CEO of Prysmian (MCap. 2.7bn), an Italian maker of high tech umbilicals/armoured cables for the energy market is reported to have said that Wellstream would be a beautiful acquisition. Although subsequently denied, Prysmian does have aspirations in the SURF flex pipe market which is a logical progression from its steel and thermoplastic umbilicals indeed Prysmian already has a 4 year frame agreement from Petrobras for flexibles, but no real capability of delivering before 2011".

JP Morgan broker note:
"Yesterday evening (after market close) Technip announced that it has won a major contract to supply flexible pipe for the Tupi field in the Brazilian pre-salt. The contract includes the engineering, procurement, manufacturing and supply of 90km of risers and flowlines for water injection, oil production, gas lift and carbon dioxide re-injection. Delivery of the pipes is scheduled to start towards the end of 2010 and finish at the end of 2012.

This is negative news for Wellstream, which has been competing with Technip for the supply of these in-field pipes, and we believe while the long-term opportunity in Brazil is substantial this will no doubt increase the markets perception that Technips product is technically superior. We highlight the fact that Wellstream was awarded the contract to supply pipe for all the extended well test (EWT) work last year, and we do not believe this award to Technip was made on technical grounds.

The Tupi pilot scheme will utilise a single Floating Production Storage & Offloading (FPSO) vessel (on a long term lease with Modec) and industry reports point to a total of 16 wells (including injectors). Petrobras was widely anticipated to use flexible risers and flowlines for the Tupi pilot scheme and Technips announcement this morning that it has agreed to purchase a second Brazilian-flagged flexlay vessel (with its partner DOF) hints at continued commitment by Petrobras for flexibles.

Wellstream's average normalised kilometre pipe price of c. 800k (920k) in 2009, indicates a contract value of c. 80m for Technip. However the range of per kilometre prices varies tremendously based on the diameter and technical specification of the pipe, and we believe the total value to Technip is substantially higher than this.

This pilot scheme is the first phase of the Tupi development, and later phases will incorporate additional floating production units (likely to be FPSOs) and demand for a much larger quantity of flexible pipe. We believe longer term pipe supply is likely to be split between Technip and Wellstream (and eventually possibly NKT Flexibles and Prysmian).
Technip's installation capability, which we generally see as an important competitive advantage, is much less relevant in Brazil as Petrobras always purchases pipe independently from installation contracts, which are managed internally (it is the only oil company that does this).

In the longer term we remain confident that the pre-salt development will incorporate both flexible and rigid risers - a subject discussed in detail in our recent report Momentum building for selection of rigid risers for Iara and Guara - flowlines to go flexible.

Profit delay is a big hurdle for WSM.

StockMarketWire.com
"Oil services group Wellstream Holdings confirms it has received a number of preliminary approaches regarding a possible offer.

The company's statement follows movement in its share price.

It says there can be no certainty that an acceptable offer will be made. A further announcement will be made in due course. "

wow! I wish I'd stayed in this one!

JP Morgan note:
"For some time we have seen Wellstream as the most likely target amongst our pan European oilfield service stocks indeed Wellstream operates in a rather consolidated market segment with a differentiated product in a subsea market with long-term structural growth opportunities. Wellstream appears to have been losing market share to its competitors outside Brazil in our view this is primarily because oil companies are increasingly looking for a one stop shop for oil services (recent M&A supports this view) the market share appears to have gone to companies like Acergy and Technip those companies that can both manufacture flexible product and install it. In addition we believe that in tight market conditions (2006-08) there was significant inflation in the installation market oil companies may have separated the procurement of pipe (50% of the total cost) from the installation contracts (50%) in a bid to increase pricing transparency and reduce cost. This would have been a positive for Wellstream during that time. In our
view it makes a lot of sense for Wellstream to be integrated into an existing installation contractor although we believe it makes less sense for an installation contractor (vessel owner) to own manufacturing capacity (indeed oil companies often specify a preferred pipe supplier). However, with much of the Subsea Umbilicals Risers and Flowlines (SURF) growth opportunity in Brazil, ownership of Wellstream can help satisfy critical local presence requirement in that market.

Wellstream has heavy operational gearing, and declining utilisation of their facility in the UK has explained much of the downgrades 2011 consensus (I/B/E/S) EPS forecasts fells by 60% in 2009 and a further 31% YTD. Wellstreams valuation (2010-11 PER of 29x and 17x based on our forecasts and yesterdays close) imply strong positive momentum going forward in our view which could materialise, particularly with the company in the right hands."

StockMarketWire.com
"General Electric (GE) has said this morning that it is disappointed that the directors of Wellstream Holdings has not accepted its takeover terms.

GE's bid is worth 7.50 per share. It says that there is no certainty it will take any further action and may make a reduced offer. "

From the special situations desk at Olivetree
"Wellstream is weak this morning on GE's statement that it (1) made a 750p rejected bid but (2) will be disciplined when considering a next move. With the stock in the 750s as a result, for the first time we think the risk reward is finally becoming attractive.

Todays statement is interesting as much for what isnt in there as for what is. Importantly GE could have walked away today but they chose not to. There is plenty of language in UK to allow them to have come back at a later date (with a recommendation for instance). So what we know now as fact is that a large industrial buyer has bid 750p, that they are still in the game despite being told to pay more, and the press widely reports that the target is looking for 800p.

It is also interesting to us that it is GE putting the statement out rather than WSM. The panel almost always goes to the target for clarification rather than the acquirer - for some reason GE have "chosen" to make the statement in WSM's place. Remember a statement from WSM could have given us clarity on the position of other bidders too. If seems possible that WSM directed the panel in GEs direction, given that GE could have given clarity on the future intentions part of yesterdays press. GE would likely have been under no obligation to comment (the real obligation lies with WSM ultimately). However, GE did comment presumably therefore by choice sending a strong signal that they ultimately want to consummate a deal. If we believe the theory that GE chose to put this statement out (although admittedly under encouragement from the panel), given the nature of the buyer and their decision to go public, we think it relatively unlikely they dont close this deal for a 5% spread.
This would be nicely in keeping with the press we saw yesterday, where we interpreted the stories as WSM guiding down expectations by effectively saying to shareholders its not going to be much more than 800p. Todays statement effectively is GE saying its not going to be much more than 800p, and its GE youre dealing with here, not some small-time buyer. So in our model, although the chances of a deal come back a little bit, they do not come back too far in fact given we have much more factual information now than ever before, the situation is more analysable than ever. We see it as likely GE would pay 800 and likely that the board would recommend this if told to do so by shareholders. All that realistically matters now is what WSM shareholders are feeding back to management - all that matters is whether shareholders tell them to sell c800p or not."