TT Electronics shares drop as Volex abandons takeover pursuit
Shares in TT Electronics dropped on Thursday after Volex backed out of a takeover pursuit of the electronic components group, after a month of speculation that it may make an offer.
Ahead of a put up or shut up deadline of this Friday, Volex said it does not intend to make an offer.
On 15 November, Volex said it had made two proposals to TT's board regarding a possible cash-and-shares offer - the first at the equivalent price of 129p and the second at 139.6p, valuing the company at £249m - but both were rejected.
TT released a statement at the time, saying the proposals "fundamentally undervalu[e] TT Electronics and its long-term prospects".
Takeover hopes have boosted the stock in recent weeks as it attempted to recover from a sharp fall in mid-September following a profit warning as a result of operational efficiency issues at two sites in North America.
News that Volex was officially walking away sent TT's share price down 8% to 109.00p by 1224 GMT, compared with the 160-170p levels seen at the start of the year. In contrast, Volex's stock was up 8% at 309.02p.
In a statement, Volex's executive chair 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 focussed on delivering its five-year plan."
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