The board of Glasgow-based mobile power giant Aggreko plc said on Friday it will recommend that shareholders accept a £2.32 billion takeover offer from a newly formed company owned by funds managed by private equity firms TDR Capital LLP and I Squared Capital.
The offer from the new company called Albion Acquisitions Limited of £8.80 per Aggreko share in cash represents a premium of 39% to the closing price on February 4, the day before the offer was made public to the market.
However, shares in Aggreko were trading well above the offer price at around £8.98 on Friday afternoon amid investor speculation that a rival bidder might emerge for the Glasgow firm.
One analyst, Andrew Brooke at RBC Capital Markets, said “… the shares are worth more.”
But analysts at Peel Hunt wrote: “We see this as a good offer … despite some recent speculation we don’t foresee a competing or higher offer.”
Bloomberg reported that Platinum Equity also made a preliminary approach to Aggreko.
Aggreko provides mobile energy for major sporting events and concerts and has a contract to supply power equipment for the Tokyo Olympics.
TDR Capital recently agreed a joint £6.8 billion deal with the billionaire Issa brothers to buy Asda.
Aggreko chairman Ken Hanna said: “The Aggreko board believes that the offer from I Squared Capital and TDR Capital represents an attractive price in cash that fairly recognises Aggreko’s future prospects.
“We believe that the business, its people and customers will continue to be well supported with I Squared Capital and TDR Capital as shareholders bringing their expertise in energy and rental markets to support our existing strategy.
“Aggreko is a great company and the actions that we have taken in the last few years, both strategically and financially, have positioned the company well to navigate the market challenges and look to the future as a leader in the energy transition.
“The leadership team set out a clear vision in November 2020 for how Aggreko can both grow profitably through the energy transition and achieve market leading carbon reduction targets.
“This strategy was well received by our partners, our customers and investors, and I Squared Capital and TDR Capital are fully supportive.”
Gary Lindsay of TDR Capital LLP said: “I Squared Capital and TDR Capital together have a proven track record and deep expertise in investing in the power infrastructure and equipment rental sectors.
“Aggreko is a business that fits this investment focus well.
“It has the potential to enable the energy transition through clean technology investment, as the world focuses increasingly on energy efficiency and sustainability.
“We fully support Aggreko’s vision for long term growth and believe our partnership will enable it to accelerate its strategy.
“We look forward to partnering with Aggreko’s management and employees to further support the company’s ongoing transformation towards a clean energy future.”