MOUCHEL, the highways and government services company, yesterday confirmed it had rejected two takeover approaches from its larger rival VT Group, but said the larger group was still interested in making a deal.
Mouchel said the offers, which were understood to have been at around 250p per share, were “wholly inadequate”, undervalued the company, and had been unanimously rejected by the board.
VT Group, the shipbuilding-turned-defence company, has made it very clear it is seeking to move into support services since divesting of its historic shipbuilding arm earlier this year. It is seeking to align itself more with support services giants Serco or Capita, and will switch its FTSE listed sector from aerospace and defence to support services next week.
Analysts say the move would add value to VT, increasing its footprint in highways and local authorities, and would be a sensible move for a company with a £400m war chest.
Serco and Capita have also been suggested as possible bidders for the highly desirable Mouchel.
Mouchel provides services including waste disposal, detecting water leaks and building roads, and is also due to start helping out with running the capital’s congestion charge scheme.
Mouchel closed up 25 per cent at 239p yesterday, following confirmation of the bid. It had closed at 190p on Friday, up 19 per cent from the previous day, after it said in a trading update it was on track to deliver a performance in line with expectations for the year to 31 July.
It has traded as high as 384p in the past year.
VT has a market cap of just under £1bn, while Mouchel is valued at around £273m.