18.01.2017

Loxam breaks cover

After more than two weeks of silence Loxam has increased its offer for Lavendon to £2.70 topping the latest TVH offer by nine pence.

Loxam has also received an undertaking from M&G for its shares, giving the company control over a total of almost 19.3 percent of the equity, close to the 20.4 percent controlled by TVH. The latest offer values Lavendon at £459 million or £617 million with net debt.

Lavendon has once again recommended the Loxam offer and has now agreed a £3.7 million break fee should the Loxam bid fail for certain reasons.

TVH immediately responded to Loxam's increased bid, asking Lavendon shareholders to take no action at this stage while it considers its options.
Meanwhile the Lavendon share price jumped to £2.75 this morning indicating an expectation that TVH will increase its offer.

Will we now see £2.71p from TVH? Watch this space...

Vertikal Comment

With the two sides in this bidding war now controlling 40 percent of the equity between them things might start to get really interesting. While it looks like two companies slugging it out to the end, I would not rule out a change of heart, and for the two of them to start talking.

They may well decide that joining forces and breaking up the Lavendon business between then is the best of all worlds? The sticking point for such a scenario though is likely to be the Middle East which both companies are likely to covet equally. They might also struggle over Nationwide Platforms- which could be split up - As to the rest the most interesting would be for Loxam to take Gardemann while TVH takes DK and Lavendon France- that’s if they each wanted to extend their reach – the opposite if the two are trying to keep each other out of their respective patches.

Who knows?

One thing that is for sure is that this battle is far from over, in the meantime it is Christmas for Lavendon shareholders.