VT GROUP, the shipbuilder-turned-support services company, has made two takeover approaches for a rival, it emerged over the weekend, as it shifts focus away from its defence roots.
Outsourcing and engineering group Mouchel, whose share price moved massively on Friday after an interim management statement, is thought to have snubbed the secret offers.
The move comes as VT, which has around £400m in cash to burn after the sale of its shipbuilding group earlier this year, prepares to switch its FTSE listed sector from aerospace and defence to support services a week today.
“VT has money to spend, and taking on Mouchel would make sense,” one industry source said. “VT wants to extend its current footprint in highways and local authority work, so this move is highly logical and fits with its strategy,” he added.
Rivals Serco and Capita are understood to be waiting for a formal bid, and are waiting to add their bids for Mouchel if it comes.
Mouchel is set to report a drop in profits in its second half, and said on Friday it would be closing its offices in the middle east.
VT Group is understood to have offered around 250p a share in its informal approaches. Mouchel’s share price has fluctuated greatly over the past 12 months; it closed at 190p on Friday – a 19 per cent rise form the previous day – but has traded as high as 384p. Based on Friday’s closing price, Mouchel’s market cap is £213m.
VT chief executive Paul Lester has made his desire to move into support services very public.
VT Group declined to comment, while Mouchel was unavailable for comment yesterday.
BOA MERRILL LYNCH
RBS HOARE GOVETT
VT GROUP is being advised by Bank of America Merrill Lynch in its approach for Mouchel given that its other joint broker RBS is acting for the other side.
VT appointed BoA to be its joint corporate broker at the end of October, days before the support services company completed the divestment of its historic shipbuilding arm.
It was the financial adviser for the firm when it sold its 45 per cent stake in BVT Surface Fleet Limited to its joint venture partner BAE Systems.
BoA is taking the driving seat in the advising process, as RBS, once a VT adviser as well, is acting as broker to the group VT is bidding for; Mouchel.
The RBS team is headed up by Neil Collingridge.
Collingridge this year advised on Balfour Beatty’s rights issue and on a shareholder loan refinancing at Tui Travel. He also helped out with car dealer Inchcape’s rights issue in March.
Last year Collingridge led a team in advising Balfour Beatty in its equity placing.
BofA has been battling with UBS and JP Morgan Cazenove to advise the cream of the FTSE crop, and has 28 blue chip companies on its books.
Michael Findlay’s decision to leave Merrill as head of UK corporate broking rocked the boat, however, and fears are rife that his departure, coupled with the BofA tie-up, could lead to client desertions.