Bodycote gets twin private equity bids as buyers feast on London market
Separate offers from CVC and Veritas value FTSE 250 industrials group at about £1.8bn including debt
The UK industrials group Bodycote has received two near-identical takeover bids from private equity groups and said it would work to secure a deal with either party.
The European investment group CVC has proposed an offer of up to 915p per share for the London-listed components business, while US buyout firm Veritas has offered up to 914p.
The bids value the company’s equity at almost £1.6bn or close to £1.8bn when debt is taken into account.
Bodycote’s board has reviewed both bids and would be “minded to recommend” each of them should they materialise into a firm offer, the company said in a statement.
“The board is working separately with CVC and Veritas on an expedited basis to announce with either party a firm intention to make an offer,” Bodycote added.
The offers increase the chances that Bodycote is taken private off the London market amid a flurry of deals for UK companies.
UK ministers and executives have been fretting about the health of London’s stock market, which has failed to attract new listings to replace a series of companies that have agreed to foreign takeovers.
Property group Segro, testing company Intertek, asset manager Schroders and insurer Beazley are among the large London-listed companies that have agreed to deals.
The value of UK-listed groups being acquired rose 188 per cent in the first seven months of the year, according to LSEG data, the highest level year to date since at least 2007.
The US investor Apollo had previously neared a £1.5bn deal for Bodycote — at about £8.85 per share — before dropping its offer in June.
The FTSE 250 company offers services including heat treatment for manufacturing, metal joining and the application of protective metallic coatings.
Shares in Bodycote gained more than 22 per cent on Wednesday after the news to trade at close to £9.20 per share.
The dearth of recent UK initial public offerings has prompted regulators to introduce a string of reforms aimed at improving London’s attractiveness as a location for IPOs.
On Wednesday, the Financial Conduct Authority said it would simplify listing rules further by removing a seven-day waiting period before research by firms connected to the listing company can be published.
The regulator said last week it would start publishing new figures designed to better show the amount of trading in London-listed shares and dispel worries about the lack of depth in UK equity markets.
The moves followed an easing of rules this year for share and bond listings, along with a three-year stamp duty holiday on shares of newly listed companies, which were also designed to boost London’s appeal as an IPO destination.
“We want the UK market to be an attractive place for companies to raise capital and grow,” said Jon Relleen, director of infrastructure and exchanges at the FCA. “By making the UK listing regime more efficient, we are supporting the growth and competitiveness of UK capital markets.”