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Mouchel takeover in confusion after Babcock bids for VT Group

Support services giant Babcock has made a surprise bid for services provider VT Group, which is in turn making a bid for consultant Mouchel.

The announcement has shocked the City, and VT Group’s proposed bid for consultant Mouchel is now under serious doubt as the city makes its thoughts felt.

However, VT Group has rejected the Babcock bid, made on February 3, and two similar bids last year.

Babcock’s bid includes a clause that specifically wanrs VT Group off any takeover attempt of Mouchel.

“Babcock reserves the right to make an offer on less favourable terms than those set out in this announcement in the event that…a third party announces a firm intention to make an offer for VT or VT announces a firm intention to make an offer for Mouchel Group plc,” Babcock told the stock markets.

This morning, VT Group confirmed it has made another bid for Mouchel, to give the company 300p per share. Shares in VT Group fell 5% on the news, while shares in Mouchel soared more than 10%.

Since Babcock’s offer, the fortunes of both VT Group and Mouchel have reversed. VT Group’s share price is now some 16% up on Friday’s close.

Shares in Mouchel have now fallen to below Friday’s close in the interim, and continue to fall.

Babcock International Group is a FTSE 250 company and one of the UK’s leading engineering support services organisations with recorded revenue of £1.9bn in 2009. Babcock delivers asset support to many sectors, including transport, energy, defence, telecommunications and education.

Babcock said that a combination with VT has significant industrial and commercial logic and would bring together two highly complementary businesses to create a large and focused international engineering support services company.

The enlarged group would have increased scale, skills and capabilities in its core markets of defence, nuclear and critical infrastructure - all of which offer significant growth potential, it said.

“Through its enhanced range of engineering skills and knowledge, the enlarged group would be better placed to lead in complex bids, achieve greater work-share and deliver increased services and efficiencies for its customers. The majority of the group’s operations would be in the UK but with opportunities to expand its existing operations in Australia, Canada, the Middle East, South Africa and the USA. Babcock believes that the combination of Babcock and VT presents a unique opportunity to create significant value for shareholders in both companies,” it said in a statement.

 

Mouchel takeover in confusion after Babcock bids for VT Group

Readers' comments (1)

  • It is times like this one wishes one was an M&A specialist of some kind

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