It’s time to start bidding up the predator

IT must be awfully hard for VT?Group to fend off Babcock, when it has been in hunter mode itself recently. It has been spinning a takeover of Mouchel with talk of synergies and scale, but balks when Babcock uses similar language.

VT’s trump card, a shareholder payout totalling as much as £230m or 126p a share, looks attractive. But investors should remember they would get some of that cash if Babcock’s bid was successful, along with shares in a FTSE 100 firm.

Babcock’s indicative offer – a maximum of 715p a share – is singing to some investors, but VT is right to hold out for more (although 800p is obviously ridiculous). VT management should bid them up and recommend the offer.