ENGINEERING and pipework group Whessoe intends to spend NKr217.7m

(#21.8m) on a Norwegian acquisition and is asking shareholders for

#14.3m towards the cost of the deal, with the remainder coming from

internal cash resources.

The discounted one-for-four rights issue at 260p a share is not

conditional on the acquisition and has been underwritten by Schroders

merchant bank. Brokers to the issue are Hoare Govett Corporate Finance.

Whessoe is buying Autronica, a company primarily involved in the

design, manufacture and distribution of maritime and industrial

instrumentation and fire security systems. The acquisition fits neatly

into Whessoe's existing instrumentation and control division which was

enhanced last year by the acquisition, again facilitated by a rights

issue, of Varec, a US-based manufacturer of a range of tank level guages

and vapour control products.

Autronica has installed equipment on board more than 9000 ships. With

the upgrading of the world fleet, retrofit sales are an important

factor, accounting for 35% of the division's turnover in 1991. The

markets for its fire detection systems include offices and business

premises, cargo vessels and cruise liners and the Norwegian off-shore

oil sector.

Despite steadily increasing turnover profit performance has been

disappointing with the company blaming this on one-off exceptional

factors. In the year to end-December 1991, profits were #1.1m before tax

compared with #2.4m in 1990. This despite a 24% increase in turnover to

#44m. However, the acquisition is expected to provide a positive

contribution to the enlarged group in the first full accounting year

following the acquisition. Autronica's net assets at the end of 1991

were #13.8m.

Whessoe directors believe the acquisition will enhance the performance

of the company in a number of ways not least through providing new

outlets for products from some of its other subsidiaries such as Elcon

and Coggin. In addition, Whessoe intends to expand the sale of

Autronica's products in markets outside Scandinavia. The acquisition

will provide Whessoe with ready-made radar technology which it would

otherwise have had to develop itself in order to offer a broader product

range.

In terms of its current trading, Whessoe directors said the early

months of the new year had been satisfactory. In the year to

end-September, profit before tax rose 13.2% to #8.3m on turnover of

#79.7m, helped by the acquisition of Varec. The final dividend was

increased by 0.2p to 2.2p for a total of 8p compared with 7.2p in 1991.

An EGM is being held on February 24 to seek shareholder approval for

the acquisition. Whessoe currently holds call options over 56.8% of

Autronica's issued share capital.