Volex calls off hostile takeover bid after cold shoulder from TT Electronics board
Volex, the Warrington-based cables group, has terminated its £248.6m hostile takeover bid for TT Electronics.
On November 15 the group revealed it had made two offers for Woking-based TT Electronics, adding that the board of TT Electronics had declined to engage with Volex and had rejected each of its proposals.
This morning, in a stock exchange announcement, Volex confirmed that it does not intend to make an offer for TT Electronics.
Volex executive chairman, Lord Rothschild, said: “Volex remains resolutely disciplined in how it allocates capital and, applying that principle, we will not proceed with an offer for TT Electronics as it is now clear that the board of TT Electronics is not willing to recommend an offer at a valuation that is also acceptable to Volex.
“Volex remains confident in its ability to meet full year expectations and remains focused on delivering its five-year plan.”
Last month Lord Rothschild had said: “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.
“Despite the resilience of TT Electronics’ underlying business, it has faced persistent challenges in recent years, which Volex believes have been exacerbated by execution missteps by the board, including former and current executive leadership. As a result TT Electronics’ shares are trading at a 10-year low.
“Since 1 January 2018, TT Electronics’ share price has declined by 65%, compared to Volex’s, which has increased over 300%.
“We firmly believe that our second proposal offers shareholders an extremely compelling alternative to the status quo.
“I, therefore, strongly encourage TT Electronics shareholders to urge the TT Electronics board to engage with Volex in delivering an expeditious and highly attractive outcome for all stakeholders.”
Today’s announcement by the Warrington-based group indicates that the required engagement failed to materialise.
