Vesuvius Shares Surge After Board Confirms RHI Magnesita Takeover Approaches
Vesuvius shares jumped in morning trade today after the company confirmed a run of takeover proposals from RHI Magnesita, the latest worth 551p a share, and said its board is still weighing it.
Vesuvius (LON: VSVS) shares were up 24.57% at 466.4p by 9:00am London time today. The FTSE 350 steel-industry group has made the biggest one-day gain in six months after a company statement on unsolicited takeover proposals from RHI Magnesita N.V.
The shares have traded between 369p and 494p so far. Vesuvius made its statement without RHI Magnesita’s prior agreement. It confirmed proposals for the entire share capital, all non-binding, dating back to September last year.
Vesuvius share price over the month to today. The latest point is a delayed intraday quote.
How unusual this is
Today’s rise is the largest one-day gain for Vesuvius in the past six months, or 126 sessions. No other session in that stretch produced a move of this size. The 466.4p level is a reading from 9:00am London time, with the session still running.
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Vesuvius daily share price changes over six months, with today’s move highlighted. Today’s point is a delayed intraday quote.
What was behind it
The Vesuvius board said RHI Magnesita’s latest proposal, received on the 27th of August, offers 470p in cash plus 0.28 new RHI shares for every 10 Vesuvius shares, a total of 551p a share based on RHI’s one-month VWAP at 27 August. Vesuvius holders would receive about 7.1 million new RHI shares and own about 13% of the enlarged RHI. The proposal includes the right to the 7.1p interim dividend. Cevian, a shareholder since 2012, has given RHI an irrevocable undertaking to back a recommended offer on those terms.
The approaches go back further. The first cash proposal, at 448p, came on the 29th of September last year. An all-cash 550p proposal followed on the 17th of March, after which the board granted due diligence access. On the 23rd of June RHI proposed 550p, made up of 454p in cash plus RHI shares, and the board unanimously rejected it on the 29th of June.
The board is evaluating the latest proposal with advisers and there is no certainty a firm offer will follow. Shareholders are advised to take no action. Under Rule 2.6(a), RHI must announce a firm offer or say it does not intend to bid by 5pm London time on the 27th of October, a deadline that can only be extended with Takeover Panel consent.
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