Babcock is growing increasingly frustrated at the lack of cooperation from VT’s management, which yesterday embarked on a whirlwind round of meetings to secure support from key shareholders.
Babcock is understood to be ready to make a raised formal offer for VT after its initial approach at 634p per share, valuing VT at £1.14bn, was immediately knocked back. The company has listened to noises from shareholders, who have made it clear they will not consider an approach below the 700p mark.
One source close to the deal said: “Those pressure points are important to us. We’d love to have a look at the books and we’ve been clear that with the benefit of that we can evaluate the true value of the business.”
VT chief executive Paul Lester is thought to have led the management team in face-to-face talks with around six major investors yesterday.
Sources close to VT said the board had the backing of some of its biggest shareholders, who were determined not to let the company go cheaply. A couple of fund managers are known to be demanding a price well above 700p per share.
Babcock’s current offer comprises 245.5p in cash and 0.701 Babcock shares for every VT share. One of VT’s objections is that 126.3p of the cash component comes from money sitting on VT’s balance sheet as a result of selling its shipbuilding arm.
VT shares ended 4.5 per cent higher yesterday at 621.5p.