Two London-listed companies have taken a step closer to foreign ownership after backing revised, albeit lower, takeover bids from overseas bidders.
On another day of negotiations in the Square Mile, construction firm Tyman backed a new bid from its US suitor and gaming group Keyword Studios struck a new deal with a Swedish private equity firm.
The pair look set to become the latest companies on the London stock market to fall into foreign hands in what has previously been called a “feeding frenzy” of takeovers. But both companies are valued at less than they were in the original deals.
Tyman, which makes door and window handles and seals and helped renovate Grand Central Station in New York, said investors will receive a special dividend as part of a revised takeover offer.
In April, the FTSE 250 company agreed a £788m takeover of US rival Quanex Building Products.
In Demand: Keyword Studios worked on Nintendo’s The Legend of Zelda games, while Tyman updated Grand Central Station
However, Tyman investors were concerned about the falling share price of Quanex, which is included in the offer, as well as the movement of exchange rates between the dollar and the pound.
Under a new agreement, Tyman shareholders will receive a special interim dividend of 15 pence per share (worth £30m), in addition to the previous offer of 240 pence in cash for each Tyman share and a proportion of Quanex shares.
The new deal is worth £750m (less than the original offer) but now includes a guaranteed cash lump sum.
In addition to updating one of New York’s most famous train stations, Tyman has worked on Crossrail, Spain’s Hotel Palacio Colomera, and France’s Le Grenier des Arts.
Quanex will remove Tyman from the FTSE 250 index and abandon its headquarters in the capital.
Tyman shareholders will vote on the new terms on July 12.
Separately, Palabras Clave Studios’ board said it would be “willing to recommend” EQT’s latest £24.50 per share takeover offer. The deal, which values the group at around £2.1bn, is also a slight drop from EQT’s £25.50 per share proposal in May. It comes after Keywords revealed it has been hit by a “small number of larger game development projects that have been postponed or cancelled” alongside weaker demand.
The AIM-listed firm provides technical and creative services to many of the world’s largest video game manufacturers, including Microsoft, Ubisoft, Electronic Arts and Activision Blizzard.
EQT, which recently bought veterinary pharmaceutical company Dechra, has until 5pm on July 3 to submit a concrete proposal or withdraw.
Commenting on the two offers, Russ Mould, an analyst at AJ Bell, said: ‘The sellers are trying to get the best possible price for their shareholders. The buyers are clearly keen to try and get the deal done.
There are concerns that a lack of investment in UK stocks has left them undervalued and vulnerable to foreign predators.
And some companies, including Betfair (owner of Paddy Power), construction supplier CRH and plumbing group Ferguson, are choosing to leave the London market and instead list elsewhere, such as New York.
Another cause for concern is the lack of companies entering the stock market through so-called initial public offerings.
