Shares in turnaround group Melrose shot up by more than 30 per cent on Wednesday after it announced the $2.8bn (£2.2bn) acquisition of a US heating and air conditioning company.
Melrose said the $86-per-share offer represented a premium of around 37.6 per cent and the Nortek board intends to recommend the deal to shareholders.
Shortly before 3pm on Wednesday, after the deal was announced, Melrose’s share price was up 34 per cent to 550p. Nortek’s, meanwhile, was up 38 per cent to $86.41.
In the year to 31 December, Nortek reported revenue of $2.5bn and a headline operating profit of $220.1m.
The deal is classified as a reverse takeover because of the size of the target.
6 July 2016 @ 2:30pmMelrose Industries (MRO)
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"Nortek is a high quality manufacturing business with over 90 per cent of its turnover in North America and product penetration into 80 per cent of US households,” said Melrose chief executive Simon Peckham.
"It serves attractive end markets at good points in their cycle, with strong brands and market positions. Nonetheless there remains solid potential for further improvement under Melrose’s guidance.
"Our ability to apply our industrial experience and investment expertise, as well as to liberate Nortek from its current capital structure will transform the prospects of the business. Our team is excited about getting to work to achieve these results as soon as possible."