VT Group recommends �1.3bn Babcock offer

By Amy Wilson, City Reporter (Defence) 736AM GMT twenty-three March 2010

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Babcock International Group

VT Group

Under the offer, VT shareholders will embrace 361.6p a share in money and 0.701 new Babcock shares.

The bid is value around 735p formed on Babcock"s shutting share cost of 532p on Monday. Based on Babcock"s share cost of 554p on Feb 12, prior to the takeover plans were done public, the suggest is value 750p per VT share.

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The shares member of the suggest has stayed the same given Babcock"s progressing approaches, with the association right away charity a bigger money sugar base to woo VT"s house and investors.

VT has rebuffed 3 bid approaches from Babcock, that maintains Britain"s arch submarine fleet, given the summer. The last suggest was for in in between 680p and 715p a share, that VT pronounced "significantly" undervalued it.

VT authorised Babcock to begin a due industry routine progressing this month, urged on by a little of the greatest shareholders, after Babcock pronounced it would not lift the suggest again until it had entrance to VT"s books to work out the turn of cost synergies in in between the dual companies. Babcock"s primary guess for synergies was �27m, but it is accepted that has right away increasing to closer to �50m after the due industry procedure.

One of VT"s largest shareholders, Artemis, last week warned the association opposite jeopardising a understanding with Babcock for the consequence of holding out for a 750p a share. Tim Steer, account physical education instructor at Artemis, pronounced he would be happy with an suggest in the range of 715p to 750p. Artemis additionally binds Babcock shares. Scottish Widows, an additional large investor, additionally corroborated a deal. About 40pc of Babcock"s shareholders additionally own VT shares.

Paul Lester, VT arch executive, was primarily strongly against to Babcock"s bid, job it a opposing step since VT, a engineering services company, has been perplexing to revoke the faith on Ministry of Defence work.

VT sole the shipbuilding commercial operation to BAE Systems last year, with the goal of creation acquisitions that would give it entrance to some-more internal supervision work. VT had to dump the own bid for Mouchel, a await services association specialising in highway maintenance, after Babcock"s approach.