Two London-listed companies have moved a step closer to foreign ownership after backing revised – but lower – takeover offers from overseas bidders.
On another day of deal making in the Square Mile, construction business Tyman threw its weight behind a fresh bid from its US suitor and gaming group Keyword Studios struck a new agreement with a Swedish private equity company.
The pair look set to become the latest firms on the London stock market to fall into foreign hands in what has previously been dubbed a takeover ‘feeding frenzy’. But both companies are valued at less than they were in the original deals.
Tyman, which makes handles and seals for doors and windows and helped revamp Grand Central Station in New York, said investors will get a special dividend as part of a revised takeover offer.
In April, the FTSE 250 firm agreed to a £788m takeover from US rival Quanex Building Products.
In demand: Keyword Studios worked on The Legend of Zelda Nintendo games, while Tyman updated Grand Central Station
However, Tyman investors were concerned about the decline of Quanex’s share price, which is built into the offer, as well as the movement of the dollar to pound exchange rates.
Under a new deal, Tyman shareholders will get a special interim dividend of 15p per share – worth £30m – as well as the previous bid of 240p in cash for every Tyman share and a proportion of Quanex shares.
The new deal is worth £750m – less than the original offer – but now includes a guaranteed cash lump sum.
Aside from updating one of New York’s most famous train stations, Tyman has worked on Crossrail, Spain’s Hotel Palacio Colomera and France’s Le Grenier des Arts.
Quanex will delist Tyman from the FTSE 250 and ditch its head office in the capital.
Tyman shareholders will vote on the new terms on July 12.
Separately, the board of Keywords Studios said it would be ‘minded to recommend’ the latest takeover offer of £24.50 per share from EQT. The deal – which values the group at about £2.1billion – is also a slight dip from EQT’s £25.50 share proposal in May. It comes as Keywords revealed it has been hit by a ‘small number of larger game development projects being deferred or cancelled’ alongside weaker demand.
The AIM-listed firm provides technical and creative services to many of the world’s largest video game manufacturers, such as Microsoft, Ubisoft, Electronic Arts and Activision Blizzard.
EQT – which recently bought veterinary pharmaceuticals company Dechra – has until 5pm on July 3 to put forward a concrete proposal or walk away.
Commenting on the two bids, Russ Mould, analyst at AJ Bell, said: ‘The sellers are trying to get the best possible price for their shareholders. The buyers are clearly keen to try and get the deals over the line.’
There are concerns that a lack of investment in UK stocks has left them undervalued and vulnerable to foreign predators.
And some companies including Paddy Power-owner Betfair, building supplier CRH and plumbing group Ferguson are choosing to leave the London market and instead list elsewhere, such as New York.
A further cause for concern is the lack of companies joining the stock market through so-called initial public offerings.
