Chief executive Paul Lester told City A.M. there would be inevitable “casualties” among VT’s head office staff, but redundancies would affect a fraction of the merged group’s 27,000-strong workforce. Job losses are expected to be in the low hundreds.
On a bittersweet day after recommending Babcock’s raised offer of 735p per share, Lester gave a personal pledge that VT employees leaving the company would be given help with their CVs and introduced to other local companies.
“I spoke to them, explained it like it is and said the deal won’t go through until the summer,” Lester said.
The chief, who will himself leave with a shares and pay package worth £5m, has also promised Babcock boss Peter Rogers he will stay on and work “flat out” to integrate the businesses before moving on.
The fused entity will almost certainly enter the FTSE 100. With sales of £3bn and a stronger presence in the nuclear space, the company will be a challenge to the likes of Serco.
It is understood approval from the UK authorities is imminent as the tie-up already has the backing of the Ministry of Defence. The merger will also need the green light from Brussels and the US, although VT is au fait with the process after offloading its shipbuilding arm last year. The deal is expected to complete in July.
Babcock has lined up £1bn financing to pay for the takeover, it emerged last night. The sum is made up of a bridge loan of £400m and a backstop facility of £600m. The loan is underwritten by Lloyds and JPMorgan.