AN ANALYST has declared Weir Group's approach for Metso as a significant step up in the Scottish company's ambitions.

Harry Philips, from Canaccord Genuity, also upped the target price on Weir Group's shares from 2500p to 3000p.

The proposed all-share deal has a long way to go with Finnish state investment company Solidium, which holds 11% of Metso, stating it does not want to sell. In a note issued yesterday Mr Philips said the fact Weir was proposing to use paper rather than make a cash call through the markets was positive.

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He said: "It appears it will be a potential merger rather than a rights issue. It also declares a significant step up in Weir's strategic ambitions, which we view as a major positive even if the proposed Metso deal is not consummated. Weir has declared an ambitious and positive strategic plan which we believe will be helped by Metso rather than being dependent upon it."

Mr Philips also pointed out the "compelling logic" of an agreement between Weir and Metso and added: "Both have large installed bases supported by networks of global service centres providing process critical components. Weir is number one in slurry pumps with a market share near 30% while Metso is the world leader in mining crushing and grinding, number one or two in construction crushing and screening, and number one in pulp and paper automation.

"Bringing Metso into the portfolio would add considerably to Weir's current Minerals addressable market of £5.7 billion and would include the £1bn comminution segment." Shares in Weir closed up 6p, or 0.24%, at 2524p.