Babcock reels in rival VT with higher offer
Tuesday 23 March 2010
Babcock’s pursuit of rival defense servces group VT Group could come to a successful conclusion as soon as today, the Independent has learned. VT’s board is understood to have accepted a bid of around 735p a share, valuing the company at just over £1.35bn. VT - which was once a naval shipbuilder but is now a support services operation focussed on the defence sector - twice rebuffed approaches from Babock last month, the most recent being a cash and share offer at 715p a share.
But Babcock has come back with a higher offer after two weeks studying VT’s books in a bid indentify synergies above the £27m a year it originally thought a tie up between the companies could generate.
Babcock is best known for its maintenance of Britain's submarine fleet. The company has to make an offer before a Takeover Panel imposed "put up or shut up" deadline of April 12 or walk away for at least six months. Babcock has made a string of acquisitions during the last decade, expanding rapidly as a result.
VT's board is now understood to have accepted that a combination between the two is inevitable at the offer's new level.
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