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VT Group puts Mouchel offer on the backburner

Defence support services firm VT Group has put its proposed £330M takeover of Mouchel on the backburner as it focuses attention on fighting a hostile bid from rival Babcock.

VT Group has been courting consultant Mouchel since late last year, and made a series of offers culminating in a £330M approach last week.

However, VT Group has itself become the takeover target of rival Babcock, and Babcock does not want anytakeover of Mouchel to go ahead. Babcock made a revised offer for VT Group last week, which VT Group has once again rejected.

A VT Group spokesman told NCE: “Mouchel is not the priority, and we are focusing our attention on defending the Babcock bid.”

A number of possibilities have emerged for VT Group to defend against Babcock:

  • A share buy-out
  • A ‘white knight’ approach from rivals BAE Systems or US aeronautics firm Lockheed to buy Babcock
  • Completing the Mouchel takeover as a ‘bitter pill’.

“All of these options are on the table,” the spokesperson confirmed, “but we have not made concrete decisions.”

He went on to say that VT Group and Mouchel are not in formal discussions, except through common shareholders.

VT Group confirmed its offer of 0.579 VT Group shares plus a half cash alternative on Friday. When initially made, the offer was worth some 300p per share, although because of Babcock’s approach, the offer has effectively risen to some 386p per share, based on today’s VT Group share price of 668p - a year high for the group.

So far VT Group has made only an approach - not a formal offer. Any final offer to buy Mouchel would rest: “On us making a formal offer or withdrawing, and it shoud be regarded as just a proposal until March 8,” he said.

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