Spectris shares jump 60% on takeover offer from Advent
One of the UK's leading listed industrial technology companies is to be taken private after receiving a £3.75 billion takeover offer from American private equity.
Shares in Spectris, whose stock has been on the slide for the past 18 months, leapt more than 60 per cent on the news.
Given the premium that the bidder, Advent International, is prepared to pay — £37.35 a share, more than 80 per cent over the £20.38 closing price of Spectris last week — the board of Spectris confirmed that it was 'minded to recommend unanimously' the offer.
Advent is a buyout specialist based in New York that has long been interested in picking up undervalued UK industrial companies and then breaking them up to extract huge profits.
In the past six years it has spent £6.6 billion buying Cobham and Ultra Electronics, two substantial FTSE 250 companies, in deals that have subsequently led to a number of divestments.
In a statement to the stock market, Spectris said Advent was offering £37.35 cash for every Spectris share and would honour the commitment of Spectris to pay shareholders an already agreed 28p dividend.
It said: 'The proposal is subject to satisfaction or waiver of a number of customary pre-conditions, including completion of satisfactory due diligence and agreement of definitive transaction documentation.'
Spectris, a leader in high-tech instrumentation and testing equipment, said it had opened its doors for due diligence to begin.
Four years ago it proposed a merger with Oxford Instruments that would have made the combined entity a £5 billion world leader in the magnetic resonance imaging scanners used in hospitals. That deal fell apart during the market volatility that followed the Russian invasion of Ukraine.
In late 2021 Spectris shares had been trading at more than £40. In the ensuing three years, as Spectris reported falling revenues and profits, the stock halved. During the recent market volatility caused by the Trump trade wars, the shares had fallen to as low as £15.
On Monday shares in Spectris closed up £12.26, or 60.2 per cent at £32.64. That was significantly short of the Advent offer, which could indicate some doubt that the transaction will go through at the bid price.
'We and many investors have increasingly seen Spectris as a takeout target, especially with the group having simplified its portfolio in recent years and with it trading at a discount to US peers,' JP Morgan analysts said in a note.
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