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Volex PLC on Friday revealed it has made two takeover offers for TT Electronics PLC, but said TT’s board has refused to engage in talks. The Basingstoke, Hampshire-based specialist integrated manufacturer of critical power and data transmission products said its initial bid for TT, a Woking, Surrey-based manufacturer of electronic components valued TT shares at 129.0 pence. The offer was for 62.9p in cash coupled with 0.203 of a new Volex share per TT share. Volex followed up with an offer valuing TT’s shares at 135.5p. However, per yesterday’s closing price for Volex, the implied value is now 139.6p, a 77% premium to TT’s closing price of 79.0p on Thursday. The second offer which comprised 62.9p in cash with 0.223 Volex shares per TT share values TT at £248.6 million. Off the back of the approaches, TT shares were up 36% to 107.10p on Friday morning in London. By contrast, Volex shares were down 12% to 302.50p. Volex said its proposal represents a ‘highly attractive opportunity’ for TT shareholders, but noted that the TT board has declined to engage with its team, rejecting both proposals. Volex Executive Chair Nat Rothschild 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.’ Volex announced its plans to buy the firm the day after TT shared a trading update and revealed its long-standing chief financial officer, Mark Hoad, is intending to retire in September next year. In the four months to October 26, TT reported a 1% reduction on organic revenue year-on-year, with 10% growth in Europe and 11% growth in Asia more than offset by a 16% decline in North America. The firm said its North America division was hurt by previously disclosed operational challenges and a subdued components market. TT revised its adjusted operating profit expectations for 2024 to be in the lower end of its previously guided range of GB37 million and £42 million. This would be down from £52.8 million in 2023. The firm said its leverage guidance remains unchanged, expecting it to be around or at the top end of its previously stated 1-2x range. Separately, on Friday Volex announced its half-year results, revealing improved profit and revenue figures. In the six months that ended September 29, revenue jumped 30% to $518.2 million from $397.5 million a year before, driven by notable sales improvements across its Electric Vehicles and Consumer Electrics divisions. Pretax profit rose by 21% to $26.5 million from $22.0 million, with Volex identifying agile resource management and cost control as contributors to its profitability. The firm said its positive trading was supported by strong procurement practices and a continuous improvement programme across all sites. Volex lifted its interim dividend by 7.1% to 1.5p from 1.4p. Volex said it expects to meet its full-year expectations for financial 2025. Executive Chair Nat Rothschild said: ‘The strong performance during the period demonstrates once again that our strategy is working. ‘Our unique capabilities, combined with a commitment to service and quality, ensure we meet the highest standards across all projects. ‘The progress we have made in the first-half, combined with our ongoing growth investment, gives us confidence in our ability to meet full year expectations.’ Copyright 2024 Alliance News Ltd. All Rights Reserved
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