Loxam outbids TVH with a 220p cash offer and gets the backing of Lavendon Board.
Companies: Lavendon Group
Today is a good day for those Lavendon shareholders that held on for a better offer. Loxam has indeed come back just in the nick of time with an all-cash offer of 220p, 7% above the initial offer received from TVH back on the 22nd November. This values Lavendon at £374m.
Furthermore, Lavendon Management has fully endorsed the offer and given irrevocable undertakings for their equity, representing approximately 0.55 per cent of the Group:
"The boards of directors of Lavendon and Loxam are pleased to announce that they have reached agreement on the terms"
The offer price represents a 58% premium to the closing price the day before the initial TVH offer came in.
It will be interesting to see whether TVH return with a counter and the share price is certainly building in the chance of another bid. However, it appears Loxam is very much the front runner now. The TVH bid had turned hostile, and it had not managed to get the support of a significant portion of the share register. Whereas Loxam's bid has the backing of the Lavendon Board, and critically, therefore, I would assume the principal shareholders.
Loxam is the biggest equipment rental company in Europe. It generated €838 million of revenues in 2015. The Group mainly focuses on construction and civil engineering and has c.5,000 employees across around 640 branches in 11 countries.
Loxam's President, Gérard Déprez, commented:
"The combination of Lavendon and Loxam represents a unique opportunity to build an unrivalled leader in the European aerial work platforms rental market. Loxam has followed Lavendon for a number of years and has been impressed by its management team and the numerous leadership positions it now holds in several markets.
The acquisition of Lavendon is consistent with Loxam's strategy to build a geographically diversified business, increase its market shares in countries where the group is already present, and further develop in specialised areas, such as aerial work platforms. The two groups are highly complementary in Europe, and Lavendon's Middle Eastern business will provide the combined entity with opportunities in growing markets.
The discussions with the Board of Lavendon have been very constructive, and Loxam has always had the objective to obtain the full support of Lavendon's Board. Loxam is looking forward to working with the Lavendon team and continuing to build a successful business."
Share are up over 5% this morning at 232p as investors digest the implications of the offer and the chances of a counter.