Babcock said an offer of 634p per share – a 25 per cent premium to VT’s current share price – was dismissed out of hand last week. Potentially lighting the fire under a hostile takeover battle, Babcock said: “[We] consider that a combination with VT has significant industrial and commercial logic.”
Of the offer, 126p would come from cash sitting on the books of VT, led by chief executive Paul Lester, raised from its exit from shipbuilding in October. Another 119p would come from fresh cash, with the remainder paid for through new Babcock shares.
BGC Partners said the approach should be “heartily welcomed” by VT. But a VT spokesperson said it would reject a bid from Babcock at any level because its rival’s business was strategically unsound due to its reliance on government defence spending.