23 Mar 10. Babcock International on Tuesday unveiled an agreed takeover of VT Group, valuing the equity of its rival at more than £1.32bn ($1.99bn) and creating one of Britain’s largest support services groups. The agreement creates a combined company with operations across defence, engineering and nuclear energy. It will have a market capitalisation of about £2.54bn, making it a potential candidate for the FTSE 100 stock market index. Under the deal, agreed on Monday night, Babcock has significantly increased the cash element of its previous indicative offers. It is now offering 361.6p in cash, as well as 0.701 new Babcock shares for each VT share. The deal includes a “mix and match” option, allowing VT shareholders to vary the proportions of cash and shares they receive. Based on Babcock’s closing share price of 532½p on Monday night, the offer values VT at £1.326bn or 734.9p a share. However, based on both companies’ share prices on February 12, before news of Babcock’s interest emerged, it represents a premium of 48 per cent to VT’s closing share price that day of 508p. Babcock had made it clear that it would not launch a formal offer unless it could gain access to VT’s books in order to accurately assess the level of cost savings from a deal. In its initial proposal, the company said it had identified merger benefits, excluding any growth synergies, of about £27m a year. It is understood that Babcock has now identified cost savings of up to £50m a year. A driving force behind the deal was shareholder pressure, to which VT buckled just over two weeks ago when the shipbuilder-turned-outsourcer agreed to open its books to its rival. The companies had several large shareholders in common. Tim Steer of Artemis, a large shareholder in both companies, had said last week that he would be ”relaxed” about an offer of 730p, adding that he would be annoyed “if for the sake of 20p it doesn’t happen”. Mike Turner, chairman of Babcock, said in a statement: ”We are delighted to have reached agreement with the board of VT to recommend our compelling offer for the company. The acquisition of such a high quality and complementary business is in line with our strategy to be the leading engineering support services company in the UK. We look forward to bringing the enhanced capabilities of the enlarged Babcock to new and existing customers”. Babcock first made two formal approaches to VT last year and in February made public an indicative proposal worth 633.9p a share. Paul Lester, the target’s chief executive, dismissed that move as “strategically unsound” since he had been trying to diversify away from defence. Babcock subsequently raised its indicative offer to 685p-715p a share, below the 750p targeted by some shareholders. VT finally agreed to start talks with Babcock and the two sides held a series of meetings over the past fortnight to establish how much Babcock would pay for the company. Babcock was advised by JP Morgan Cazenove and Evercore Partners, while Rothschild acted for VT.
22 Mar 10. In 2009, MBDA, the European leader and global player in the missile systems sector, received orders valued at Euros 2.6bn, an increase over the total achieved in 2008 (Euros2.3bn). The order book maintains its high level with a total of Euros12bn as of 31st December 2009, representing approximately four years of activity for the business. Sales achieved a total of Euros2.6bn, a slight drop compared to the previous year’s figure of Euros2.7bn. Domestic orders amounted to Euros1.27bn, a total comparable to 2008. Export orders achieved a total of Euros1.33bn thereby meeting the target set for this aspect of the business, namely that export orders should exceed 50% of the total order intake. Commenting on these results, Antoine Bouvier, Chief Executive Officer of MBDA, stated: “Looking back on 2009, this was an important year with significant successes and good financial results albeit with some disappointments regarding certain programmes. Our le