Bodycote attracts rival £1.56bn buyout approaches from CVC and Veritas Capital

UK-listed thermal processing specialist Bodycote has confirmed it is evaluating competing takeover proposals from private equity firms CVC Advisers and Veritas Capital, with each valuing the business at approximately £1.56bn (USD2.1bn), according to a report by Reuters.

The company said both proposals remain at a preliminary stage but indicated its board would be prepared to recommend either transaction if a firm offer is agreed on acceptable terms.

CVC has proposed an offer worth up to 915p per share, comprising 907.8p in cash together with Bodycote’s interim dividend of 7.2p per share. Veritas Capital’s proposal values the shares at up to 914p, also including the interim dividend.

The approaches represent premiums of around 22% to Bodycote’s closing share price on Tuesday. Investors responded positively to the news, sending the company’s shares as high as 927.5p during Wednesday’s trading before closing at 923p, above the value of both indicative bids.

The competing approaches follow Apollo Global Management’s decision in June to abandon an 885p-per-share proposal, which valued the engineering services provider at approximately £1.52bn.

Bodycote, which provides heat treatment and specialist metal processing services to customers across the aerospace, defence, automotive and energy sectors, said it is engaging with both prospective acquirers on an accelerated timetable.

Under the UK Takeover Code, CVC and Veritas have until 2 September to announce a firm intention to make an offer or withdraw their interest.