British auto parts maker TI Fluid Systems approves £1bn takeover bid from Canadian company

TI Fluid Systems has become the latest major British company to agree a takeover deal with a foreign company this week.

The auto parts supplier revealed it had accepted a £1bn bid from Canadian rival ABC Technologies, which makes vehicle components including defrosters, door panels and fuel tanks, for some of the world’s largest carmakers. world.

ABC said the acquisition would strengthen its product portfolio and presence in key automotive markets in Asia, Europe and the Americas.

Under the terms of the transaction, TI investors will receive 200 pence per share, a premium of 47.3 percent over the share’s closing price of 135.8 pence on September 12, the last day before it began the current offer period.

ABC made two unsolicited bids for the business earlier this summer worth 165p and 176p per share respectively, but both were rejected by TI as being too low.

Last week, the City Takeover Panel extended the deadline for ABC to make a “put up or shut up” offer for the Oxford-based group until 5pm today.

Both companies expect the acquisition to be completed in the first half of 2025, subject to approval by TI shareholders representing at least three-quarters of the votes.

Tim Cobbold, president of TI Fluid Systems, said the expanded business would be “better positioned to meet the current challenges facing the automotive industry and achieve long-term sustainable growth.”

It added that the offer “represents an attractive premium and provides shareholders with the certainty of cash consideration that reflects the fundamental strengths and opportunities of TI Fluid Systems, while recognizing the broader uncertainties of the industry.”

While it was officially founded in 2000, TI’s roots date back to Bundy Corporation, which was created in 1922 and supplied fuel lines for the Ford Model T.

The announcement of TI’s acquisition comes just a day after waste management company Renewi approved a £700m bid from Australian asset manager Macquarie.

Cozy Club operator Loungers also said yes to a £351m bid from Majestic Wines owner Fortress Investment Group.

London-listed companies are often seen as attractive takeover targets due to the perception that they are undervalued relative to their global peers.

Cybersecurity specialist Darktrace, video game service provider Keywords Studios and music rights investor Hipgnosis Songs Fund have all become foreign owners this year.

Investment platform Hargreaves Lansdown, soft drinks producer Britvic and Royal Mail owner International Distribution Services have also made takeover deals worth billions of pounds.

Dan Coatsworth, investment analyst at AJ Bell, said: ‘Like many other takeover targets in recent years, TI Fluid struggled to generate much enthusiasm among investors and traded at the kind of valuation that left it vulnerable to a bid.

‘Shares have traded below eight times trailing 12-month earnings from 2022, putting TI Fluid in bargain territory. It was only a matter of time before someone fell for it.

TI Fluid Systems Stock They rose 1.8 percent to 192.6 pence on Friday afternoon.