22nd Apr 2024 10:13
(Alliance News) - Investment bank Jefferies thinks the surprising offer for Tyman PLC from US peer Quanex Building Products Corp will be "attractive" to investors.
On Monday, Tyman, a London-based supplier of window and door components to the construction industry agreed to a GBP788 million takeover offer from Quanex.
The cash and shares bid values each Tyman share at 400 pence, based on the Quanex closing share price of USD34.64 on Friday in New York.
Shares in Tyman soared 29% to 386.17p in London on Monday morning.
Jefferies said it was an "unexpected development".
The broker explained a bid was something it had expected to see one to two years ago, prior to the stock's recent rally. In the past 12 months, Tyman's share price has risen 57%, including Monday's sharp increase.
Jefferies noted the offer comes at a "healthy premium" to Friday's close. The implied value per share of 400p also is an 11% premium to its own price target of 360p per share, and a 13% premium to the market consensus price target of 354p.
"As such, we believe the offer should be attractive to Tyman holders (particularly given current market conditions), despite the consideration that receiving US-listed shares may not be ideal, and we don't foresee many major holdouts", the broker remarked.
However, Liberum's Edward Prest suggested there may be rival interest in Tyman.
"We would not rule out another bid from a range of possible trade buyers," he commented.
For every Tyman share held, investors will receive 240p cash plus 0.05715 of a Quanex share.
Some Tyman shareholders will be able to elect an all-share option worth 0.14288 of a Quanex share for every one held in Tyman. The all-share alternative will be capped at 25% of Tyman shares.
Quanex, a Houston, Texas-based metal window and door manufacturing company, said Teleios Global Opportunities Master Fund, acting for 16.4% of Tyman shares, is supporting the bid.
Tyman said all directors, who hold shares in the firm, also back the offer, representing 0.23% of share capital.
Tyman Non-Executive Chair Nicky Hartery said: "In the context of a rapidly evolving North American marketplace, our board ultimately determined that this transaction is the best path to maximising value for Tyman shareholders, who will be able to realise a meaningful portion of their holding in cash at a significant premium to the prevailing share price while also participating in the future upside of the enlarged group."
It is expected that deal will be implemented by way of a court-sanctioned scheme of arrangement, with completion likely in the second half of 2024.
By Jeremy Cutler, Alliance News reporter
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