A second major British business in two days has decided to throw in the towel on life as an independent publicly quoted company in London after accepting a takeover bid from a foreign bidder.
Oxford headquartered TI Fluid Systems, which makes brakes, cooling and climate control fluid carrying systems and fuel tank systems for many of the world’s biggest motor manufacturers today said it had agreed a 200p a share offer from Canada’s ABC Technologies. The deal values the 102 year old target at £1.04 billion.
The company said the offer represents a 47% premium to the share price on 12 September, the last trading day before speculation about a possible takeover bid started to hit the market.
The deal comes the day after bar and restaurant operator Loungers said it had agreed to a £338 million offer from New York private equity giant Fortress Investment.
TI Fluid Systems directors, who were advised by Goldman Sachs and Peel Hunt, said they had decided to accept the offer because pf disruption and uncertainty in the global automotive sector combined with the “long term potential” of the business not being reflected in its valuation.
This meant that there was a risk of “future volatility” in the share price.
The two sides have been in talks for several months with Toronto based ABC making a number of unsolicited takeover proposals including an initial tilt at 165p a share.
TI directors said the 200p offer on the table was a chance for shareholders “to realise an immediate and certain cash value today for the entirety of their investment at a level which may not be achievable until the execution of TI Fluid Systems’ strategy is delivered over the medium to longer term, with that execution subject to a number of factors outside of TI Fluid Systems’ control.”
TI listed in London in 2017 and is a member of the FTSE 250 second tier of major UK businesses.
Tim Cobbold, the chair of TI Fluid Systems, said: “The combination will result in a larger, more diversified business with a broader range of products and customers, better positioned to navigate the current challenges facing the automotive industry and deliver sustainable long-term growth.
“The TI Fluid Systems board believes that the offer represents an attractive premium and provides shareholders with the certainty of a cash consideration that reflects TI Fluid Systems’ fundamental strengths and opportunities, while also acknowledging the wider industry uncertainties.”
TI Fluid Systems was founded in 1922 as Harry Bundy & Co. It now has 25,600 employees at 98 manufacturing locations in 28 countries but has its global HQ in Oxford.
ABC, which is majority owned by investment funds managed by Apollo Management, dates back to 1974, and manufactures plastic components for vehicles.
Terry Campbell, president and chief executive of ABC Technologies, said: “This transaction is a transformative strategic opportunity which unlocks value for all of our stakeholders and provides a platform for further growth.
“A combined business will enable us to better serve our customers, and I am excited for our teammates as we continue to build a winning future. We will be persistent in seeking alignment with organisations that have proven capabilities to further ABC Technologies’ success story.”
