TT Electronics shares were sharply higher in early Friday trade on news that Lonon-listed competitor Volex had made several takeover approaches.
Volex, a specialist in data connectivity solutions, has made two separate takeover proposals to TT Electronics. According to a statement released by Volex on Friday, TT Electronics’ board rejected both offers and declined to engage in discussions.
Nevertheless, the takeover talk sent TT Electronics shares soaring higher by 38% to 109p.
The initial proposal, valued at 129p per share, consisted of 62.9 pence in cash and 0.203 new Volex shares for each TT Electronics share. This was followed by a second, enhanced proposal offering, valued at 135.5 pence per share at the time of the offer.
Based on Volex’s share price at the close of business on 14 November 2024, the latest proposal now values each TT Electronics share at 139.6 pence, translating to a TT Electronics valuation of £248.6 million.
This represents a premium of 76.7 per cent above TT Electronics’ closing price of 79.0 pence on 14 November 2024, and a 73.2 per cent premium over the one-month volume-weighted average share price.
“We believe that bringing Volex and TT Electronics together in a highly synergistic transaction would create a scaled and diversified leader in the specialist electronics market which would act as a platform for future organic and inorganic growth and significant value creation,” said Lord Rothschild, Executive Chairman of Volex.
“TT Electronics would provide the Group with further exposure to structural growth markets, such as medical and industrial technology, and add a new end-market, aerospace and defence, to progress Volex’s successful strategy of diversification. At the same time, TT Electronics would benefit from being part of a larger group with stronger performance and the associated opportunities for revenue and cost synergies to deliver higher profitability.”
Should the second proposal proceed to a formal offer, Volex intends to implement a mix-and-match facility, providing TT Electronics shareholders with additional flexibility in how they receive their consideration.