AB soars on news of takeover bid

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TT GROUP, the acquisitive industrial holding company, has added AB Electronic Products Group, the components maker, to its growing list of takeover targets.

AB, which made a pounds 3.5m first- half loss, revealed that TT had acquired 6.4 per cent of its shares and proposed a merger, which AB was discussing with TT. The disclosure led to a 15 per cent surge in AB's shares to 90p, valuing it at pounds 22m.

AB is the fourth company in which TT has amassed a substantial stake. In March, it acquired 7.5 per cent of ML Holdings, an electronics and cargo handling equipment maker.

It has built up 6 per cent in Renold, the chains group, and has hung on to 38 per cent of Magnetic Materials since losing a pounds 10m bid last year.

Led by John Newman, a former Hanson executive, TT's strategy is to acquire underperforming companies and improve their margins by tight financial controls.

However, it has yet to clinch a successful bid since winning control of Crystalate two years ago.

AB is seeking clarification of TT's intentions. 'The board recently announced a clearly defined strategy for the development of its core businesses and has declared an intention to seek partners who can add further momentum towards achieving that strategy.

'In its discussions with TT it will seek to establish the extent to which a merger would facilitate that objective.'