VT opens books to Babcock (From Hampshire Chronicle)

VT opens books to Babcock

10:51am Friday 5th March 2010 in

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A TAKEOVER of Hampshire shipbuilder-turned-support services specialist VT Group moved a step closer after it bowed to pressure and opened its books to Babcock.

The Botley-based outsourcing group has also abandoned its pursuit of rival Mouchel, which it had hoped to buy in a £330m deal.

Such ambitions have been torpedoed by submarine maintenance specialist Babcock, which has seen shareholders encourage VT to explore its £1.25 billion offer.

VT’s withdrawal comes ahead of a “put up or shut up” deadline set for Monday by the Takeover Panel.

Babcock was this week given a date of April 12 to reveal whether it intended to make a formal offer for VT.

Paul Lester, VT chief executive, has argued against the logic of a merger, saying it significantly undervalues the business.

However, Scottish Widows – a large shareholder in both Babcock and VT – has reportedly thrown its weight behind a deal and said significant shareholder value could be created.

Yesterday, VT gave in and allowed Babcock to look at the books in order to calculate the cost savings a merger could provide.