FTSE 250 facilities manager swept off London Stock Exchange in £3.1bn deal
Mitie is set to become the latest company picked off the London Stock Exchange, after agreeing to a £3.1bn takeover by UK rival OCS.
The global facilities management company agreed to pay 221.6p in cash for the firm, comprising 218.5p per Mitie share and a final dividend of up to 3.1p.
The offer price is a 44.7 premium to Mitie’s closing share price on 20 July.
The group’s board considers the terms of the acquisition to be “fair and reasonable” and plan to vote their own shares in favour.
It “unanimously” intends to recommend that shareholders vote in favour as well.
Chris Rogers, chairman of Mitie, said: “The board believes OCS’s offer recognises the strength of the business, the progress achieved in recent years and the opportunities ahead.
“Having carefully reviewed the offer, the board has unanimously concluded that it represents an attractive outcome for shareholders, delivering the certainty of cash consideration.”
OCS, which is one of the world’s largest facilities management groups operating across 26 countries, said the deal would create a British firm better positioned to “support the organisations that keep the country running”.
Mitie’s share price rocketed 40.5 per cent in early trading to 212.2p, pushing the stock up 28.4 per cent since January.
Buyers swarm the exchange
The deal marks yet another London listed company being snapped up by a private buyer at soaring premiums, after engineering group Rotork was plucked off the mid-cap index last week for £4.1bn at a 73 per cent premium.
Private equity firms and companies have also been circling large cap stalwarts. Insurer Beazley was poached by Zurich for £8.1bn at a 59.8 per cent premium, while Nuveen snapped Schroders for £9.9bn at a 34 per cent premium.
The deals, combined with an IPO drought, are shrinking the London market.
There were only seven listings in the first half of the year, raising £577.2m. The total market value of the new listings reached just £2.2bn, according to data from Peel Hunt.
Chief executive officer of Peel Hunt urged the government to do more to stop the trend last week after the Rotork acquisition, arguing it is weakening the “UK’s tax base and growth prospects”.
Writing on Linkedin, Fine said: “The equity market is a strategic national asset. When companies list elsewhere or are acquired and disappear from the market, the impact extends far beyond stamp duty.”