Shares of U.S. Filter Corp., an industry leader in water and waste-water treatment, rose 20% on Wednesday in a flurry of trading on rumors the company is a takeover candidate.
Since 1990, Palm Desert-based U.S. Filter has pursued an aggressive strategy to be the global leader in municipal and industrial water treatment by acquiring more than 100 companies. Last year, it bought Culligan Water Technologies Inc. for about $1.5 billion in stock.
Possible buyers of U.S. Filter include Enron Corp, the Houston-based energy giant; Tyco International Ltd., the Bermuda-based industrial conglomerate; a French water company; and General Electric Co., the Fairfield, Conn., firm, analysts said. "Those are the usual suspects, but it could be a lot of other people too," said James Samuels, an analyst who follows the company for NationsBanc Montgomery Securities in New York.
On the New York Stock Exchange, U.S. Filter shares rose $4.94 to close at $29.94 in heavy trading of more than 7.2 million shares.
"Obviously, something is going on there, but they aren't saying anything," said Tom Burnett, founder of Merger Insight, a New York-based institutional research service.
Chief Executive Richard J. Heckmann would not comment Wednesday. Heckmann, a former stock brokerage executive in the Palm Springs area, led an investor group that seized control of then-troubled U.S. Filter in 1990.
U.S. Filter, the world's largest water-treatment firm, now has more than 2,700 employees worldwide and 100 manufacturing plants in 94 countries, including Egypt, Mexico and Germany.
Some analysts said it makes sense for Heckmann, who has tried to turn his company into a household name for water by acquiring other firms, to sell the firm now. That's because the company's low stock price--even with a recent rebound, shares remain well off their $36.25 high in April--and a balance sheet stretched thin from so many takeovers make it difficult to continue his buying spree.
"He's impatient. So what does he do? He sells out to some other outfit and becomes a major player there--or takes his money and goes somewhere else to start another firm," said Samuels of NationsBanc. "It makes sense to me that he would be doing this."