VT Group has dismissed an audacious takeover bid by contractor Babcock, describing the firm as “strategically challenged”.
Following several weeks of speculation, VT Group this morning made a bid for Mouchel, valuing the company at around 300p per share.
A short time later it was revealed that contractor Babcock had put in a bid for VT Group, giving a 20% premium on VT Group’s shares. The bid included a clause specifically relating to the Mouchel takeover, indicating it would make a less favourable offer should VT Group make a firm bid for Mouchel.
The City reacted instantly, with shares in VT Group rising from Friday’s close by some 15%, and shares in Mouchel dropping by a similar proportion, indicating that the City approved of Babcock’s bid.
However, a VT Group spokesman said that despite the City’s confidence in Babcock’s bid for VT Group, it was intent on going through with the Mouchel takeover.
“The Babcock bid is totally rejected and unacceptable, and we are intent on pursuing a deal to buy Mouchel.
“Babcock is strategically challenged because it relies on the vagaries of the defence budget, which is why we [VT Group] got out of shipbuilding in the first place.
“The bid is totally unacceptable and completely undervalues the company,” he said, adding that the decision was strategic, and further improved bids would not be well received.
VT Group rejects Babcock takeover bid