Coal processing equipment manufacturer and engineer, Ludowici has agreed to be bought by a Danish firm in a bid worth a total of $267 million, an announcement that saw the shares jump 91% yesterday.

Danish engineering group FLSmidth said yesterday that it had offered $7.20 per share to acquire Ludowici.

The shares rose 91.4% on the news to settle at $6.70, a gain of $3.20 on the day and one of the largest rises seen for some time in a takeover deal.

The value includes the cash offer and the debt in Ludowici.

FLSmidth said the price would be reduced by any dividend Ludowici pays to its shareholders before the deal completes.

FLSmidth said that the offer price represented a premium of 106% over Ludowici's share price before the offer was announced: in other words there's a strong case the local investment industry has completely under valued the company and possibly other small caps in the area.

FLSmidth & Co said that Ludowici's board had agreed to recommend the offer to its shareholders on condition that there was no superior offer and that an independent expert found that the deal was in shareholders' best interest.

The offer is subject to a number of conditions, including satisfactory completion of due diligence, execution of a final agreement, absence of significant negative events, and all necessary regulatory approvals, FLSmidth said.

Ludowici is the world's leading provider of coal centrifuges, vibrating screens and complementary wear resistant products and services for the minerals industries.

Acquiring the Brisbane-based company would enable FLSmidth to complement its coal processing technology and improve its copper and iron ore offerings with leading technologies and brands, the Danish company said in yesterday's statement.

FLSmidth, a supplier of engineering services and machinery to the global cement and mining industries, said that Ludowici's board had allowed it to carry out due diligence, and the parties agreed to negotiate a detailed agreement.

Ludowici has a strong presence in many major mining countries such as Australia, South Africa, India, China, Chile, Peru and the US.

The company employs approximately 1,000 people around the world.

It said Ludowici Investments Pty Limited and Julian Ludowici and the other Ludowici Directors, who together control about 22% of Ludowici's stock, have agreed to support the offer in the absence of a superior proposal. The Ludowici family will take more than $50 million dollars if the deal succeeds.

"It is expected that the proposed acquisition would lead to a number of sales and cost synergies," the Danish company said. "FLSmidth will evaluate potential synergies after completion of the acquisition."

Ludowici is a company that might have been attractive to the likes of Bradken or even Campbell Brothers, both of which supply services or products to the mining industry.

But the Danish company, which already operates in Australia, saw the value and the opportunity.

"It is FLSmidth's strategy to become a market leader in every major minerals processing segment of which coal, copper and iron ore are three of the prioritised segments.

"The acquisition of Ludowici will allow FLSmidth to complete its coal processing flow sheet and improve its copper and iron ore offerings with leading technologies and brands.

"With some 450 employees and approximately 65% of its turnover in Australia, the acquisition of Ludowici will significantly expand FLSmidth's presence in this important mining region.

"Furthermore, the acquisition will support FLSmidth's aspiration to expand its Customer Services offering as approximately 60% of Ludowici's turnover relates to Customer Services activities, including spare parts and consumables," the Danish company said in yesterday's statement.

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