Key Takeaways:
Apollo Global Management has made a conditional £1.52 billion ($2.04 billion) all-cash proposal to acquire heat treatment firm Bodycote, the latest in a string of takeover attempts that sent the UK company's shares soaring 19 percent.
"The proposal followed several earlier approaches from Apollo and the two sides were in talks," Bodycote said in a statement, while cautioning that there was no certainty any firm offer would be made.
The 885 pence-per-share offer represents a 27% premium to Bodycote's closing price on May 21. Following the news, shares in the London-listed firm closed up 19% at 831.50 pence. The offer also allows shareholders to retain a final dividend of 16.1 pence per share for the 2025 financial year.
The move highlights persistent interest from private equity in UK-listed industrial companies, which are often seen as undervalued. Apollo has a deadline of June 19 to formalize its offer, a period during which Bodycote's board will evaluate the proposal against the company's standalone prospects in the aerospace, defense, and automotive sectors it serves.
The proposed acquisition of Bodycote is the most recent example of overseas buyers, particularly U.S.-based private equity, targeting British firms. Companies like Intertek and Tate & Lyle have seen similar approaches, fueled by what some analysts see as a valuation gap between UK and international markets.
Bodycote's services are critical for improving the durability of metal components across various industrial sectors, including aerospace, defense, automotive, and energy. This position gives it a resilient profile that is attractive to long-term investors like Apollo.
Under the terms of the potential deal, the U.S. asset manager would acquire the entire issued and to be issued share capital of Bodycote. The talks between the two companies are ongoing as the deadline approaches.
This article is for informational purposes only and does not constitute investment advice.
