buglerbilly
23-03-10, 02:54 PM
From Times Online March 23, 2010
VT Group succumbs to £1.33bn Babcock offer
Patrick Hosking and Robert Lea
VT Group today capitulated in the seven-week siege by Babcock International, agreeing to a £1.33 billion cash-and-shares bid from the rival defence services group.
Mike Jeffries, the chairman of VT Group, said: "The VT board believes that Babcock's offer represents an attractive proposition for VT shareholders, both through the immediate offer premium and through the opportunity to benefit from the synergies available from combining our two businesses."
VT has accepted 361.6p in cash and 0.701 of a Babcock share for every VT share, which values VT at 750p per share. This is a premium of 42 per cent to the average VT share price over the month to 12 February.
Shares in VT Group rose by 33p, or 4.8 per centt, to 723p in early trading today. Babcock's stock rose 16.5p, or 3 per cent, to 549p
Under the terms of the deal, VT shareholders will not receive a final dividend in respect of the year to March 2010. There will be a mix-and-match facility, enabling shareholders to choose more or less cash, according to demand.
VT rejected an earlier 634p bid as "strategically unsound" in February, but was persuaded to open its books when Babcock suggested that it might lift the offer to 680p-715p.
Today it said the offer was "fair and reasonable" and recommended that shareholders accept after taking advice from Rothschild.
Mike Turner, the chairman of Babcock, said: "We are delighted to have reached agreement with the board of VT to recommend our compelling offer for the company. The acquisition of such a high-quality and complementary business is in line with our strategy to be the leading engineering support services company in the UK."
The combined company is expected to be big enough to enter the FTSE 100 index of blue chip shares. A big investor in both companies said: “Many of us thought that this would happen one way or another. Both are mid-cap companies of the same size — either Babcock would take VT or the other way round. The offer is likely to be attractive to shareholders of both.”
Babcock has coveted VT’s Ministry of Defence contracts servicing the RAF to sit with its Royal Navy interests at Devonport and Rosyth. The deal will help to propel it into new areas, including building schools and servicing police vehicles.
VT Group succumbs to £1.33bn Babcock offer
Patrick Hosking and Robert Lea
VT Group today capitulated in the seven-week siege by Babcock International, agreeing to a £1.33 billion cash-and-shares bid from the rival defence services group.
Mike Jeffries, the chairman of VT Group, said: "The VT board believes that Babcock's offer represents an attractive proposition for VT shareholders, both through the immediate offer premium and through the opportunity to benefit from the synergies available from combining our two businesses."
VT has accepted 361.6p in cash and 0.701 of a Babcock share for every VT share, which values VT at 750p per share. This is a premium of 42 per cent to the average VT share price over the month to 12 February.
Shares in VT Group rose by 33p, or 4.8 per centt, to 723p in early trading today. Babcock's stock rose 16.5p, or 3 per cent, to 549p
Under the terms of the deal, VT shareholders will not receive a final dividend in respect of the year to March 2010. There will be a mix-and-match facility, enabling shareholders to choose more or less cash, according to demand.
VT rejected an earlier 634p bid as "strategically unsound" in February, but was persuaded to open its books when Babcock suggested that it might lift the offer to 680p-715p.
Today it said the offer was "fair and reasonable" and recommended that shareholders accept after taking advice from Rothschild.
Mike Turner, the chairman of Babcock, said: "We are delighted to have reached agreement with the board of VT to recommend our compelling offer for the company. The acquisition of such a high-quality and complementary business is in line with our strategy to be the leading engineering support services company in the UK."
The combined company is expected to be big enough to enter the FTSE 100 index of blue chip shares. A big investor in both companies said: “Many of us thought that this would happen one way or another. Both are mid-cap companies of the same size — either Babcock would take VT or the other way round. The offer is likely to be attractive to shareholders of both.”
Babcock has coveted VT’s Ministry of Defence contracts servicing the RAF to sit with its Royal Navy interests at Devonport and Rosyth. The deal will help to propel it into new areas, including building schools and servicing police vehicles.