Two private equity firms have pulled out of a $900 million takeover bid for engineer Bradken because of volatility in commodity and financial markets.
In December, Pacific Equity Partners and Bain Capital Asia made a $5.10 share bid for the 90-year-old Bradken.
Bradken, which has a restructuring program to save $27 million a year by July 2015, employs 4,600 people and is a supplier to the global resources, energy and freight rail industries.
However, Bradken told the market today: “The recent volatility in global commodity and financing markets has impacted the consortium’s ability to obtain financing.”
The company said in a statement, “There are no visible signs at this stage of a turnaround in the mining cycle. However, tonnages mined for most metals, which is the key driver of demand for Bradken’s products, continue to increase.”
Bradken shares immediately lost their takeover premium, falling almost 33% today to $2.76.
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