VT rejects Babcock takeover bid

ENGINEERING firm Babcock International has revealed an approach for rival VT Group worth more than £1 billion, but said it was given short shrift by its takeover target.

Babcock, which employs some 17,000 staff worldwide, yesterday said it had put forward a proposed deal worth 633.9p a share for Southampton-based support services firm VT – the former Vosper Thornycroft business .

It said VT's board had rejected the approach, which is worth about 1.14bn, and had refused to enter takeover talks.

Babcock had already made two formal approaches to VT last year before sending a letter to the board on 3 February outlining its takeover rationale, Babcock confirmed.

The news comes as VT itself is striding ahead with takeover ambitions, having yesterday upped its bid for outsourcing and engineering firm Mouchel to 330 million. VT is on the hunt for acquisitions after building up a war chest of 500m, largely thanks to the 346m sale of its 45 per cent holding in BVT Surface Fleet naval shipbuilding to joint venture partner BAE Systems.

Babcock said: "It is disappointing that VT's board has declined to discuss this further with Babcock or to engage with a view to exploring terms which might be acceptable to them. Babcock believes it is in the interests of both companies' shareholders for Babcock and VT to work together towards an agreed transaction for the mutual benefit of all stakeholders."

It said a takeover of VT would see the two firms cut some 27m off combined annual costs if they were to join forces, with a further 6m in tax savings.