9th Aug 2022 15:50
(Alliance News) - Shares in RPS Group PLC soared on Tuesday after the professional services firm agreed to be bought by Toronto-listed consultancy firm WSP Global Inc in a deal worth more than GBP590 million.
Broker Liberum cut its recommendation on RPS to 'hold' from 'buy' due to its view that the deal will go through.
WSP will buy RPS for 206 pence per share, in cash. The deal values the professional services firm at GBP591.1 million and the offer price is a 76% premium to RPS's closing price on Monday.
Shares in RPS were trading 74% higher at 204.00p in London on Tuesday afternoon. WSP Global was trading at CAD152.28, down 3.4% in Toronto, valuing it at CAD18.07 billion, about GBP12 billion.
WSP provides engineering consulting services in the energy, maritime, infrastructure and rail and transport spaces. RPS works in fields including health and safety, exploration and development, planning and approvals and communications.
RPS Chair Ken Lever backed the firm and its prospects, but said the WSP offer was "compelling". The RPS board unanimously supports the deal.
Broker Liberum said: "We are not surprised that WSP sees value here given WSP's track record of consolidation, the strong momentum at RPS in FY22 and the potential for synergies."
The deal looks to be a "good price", Liberum added as it increased its price target on RPS to 206p from 150p, believing the deal will complete.
By Lucy Heming; [email protected] and Eric Cunha; [email protected]
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