22.11.2016

TVH bids for Lavendon

Belgian parts, access and forklift specialist TVH has announced an unsolicited offer to acquire Lavendon this morning, according to its statement the cash offer totals £348 million, which when combined with Lavendon’s net debt values the company at around £506 million.

TVH already has commitments from two shareholders GVQ Investment Funds (Dublin) and Unicorn Asset Management, which between them own 12.3 percent of the equity. The cash offer represents a premium of over 50 percent.

Pascal Vanhalst of TVH, said: "The acquisition of Lavendon would represent a significant step forward in the growth of our specialised rental activities. It would also bolster our geographical expansion strategy as TVH Equipment would become active in new markets such as the UK, the Middle East and France. With Lavendon's vast rental know-how and focus on safety, the customers of the enlarged group would clearly benefit.”

“Our strong preference has always been to announce an offer with the full support of the board of Lavendon. TVH, Lavendon and our respective advisers worked together towards a firm offer announcement at a price of 200 pence per share in cash, which the board of Lavendon intended to recommend. Following discussions with certain shareholders, we increased our proposed offer price to 205 pence in cash.”

“Despite the increase, the board of Lavendon withdrew its support on the grounds of concerns around deliverability of a scheme of arrangement. To address the board's concerns and secure its support, TVH proposed changing the structure to a contractual offer, however the board of Lavendon continued to be unwilling to recommend the offer.”

“TVH believes the Offer fully values the Company and its prospects and has therefore decided to release this firm offer announcement to allow Lavendon shareholders to decide on the merits of the Offer."

TVH is one of the largest access rental companies in Europe operating under its own brand as well as Gunco - primarily in the Benelux region and Mateco in Germany and German speaking markets.

Vertikal Comment

TVH previously took a run at Lavendon in late 2010, that battle went on for six weeks or so, with Ashtead joining TVH in a joint bid towards the end. Ashtead was going to take the Nationwide operation, while TVH would have had DK, Gardemann and Rapid Access in the Middle East.

That offer was eventually worth around £115p.
Lavendon shares have jumped 33 percent after the announcement this morning, taking them to 185 pence, well below the offer price, suggesting that few shareholders believe that a deal, which requires 75 percent acceptance, will go ahead.

Given the recent performance of Lavendon’s businesses shareholders may well do better to hold at this point rather than sell. TVH on the other hand will probably not give and may yet come back with an improved offer?