Ricardo PLC (LSE:RCDO) has agreed to be taken over by Canada's WSP Group (TSX:WSP) in a 430p-per-share deal that values the UK engineering and environmental consultancy at £281 million.
The boards of the two companies agreed on the terms of a recommended final cash offer that represents a premium of 28% to the closing price yesterday of 335p and 69% over the average for the past three months.
However, the level of the bid looks opportunistic given that a price above 500p was seen as little as a year ago, though this was undermined by a profit warning from Ricardo in January, as the company warned that delays in orders would hit full-year results.
Also in January, Ricardo sold its defence business to fund the acquisition of Australia’s E3 Advisory.
Ricardo's directors said they unanimously consider the WSP offer to be "fair and reasonable" and consider the terms of deal to be "in the best interests of Ricardo shareholders as a whole".
WSP has received irrevocable undertakings in favour of the scheme from various institutional investors, including Gresham House Asset Management, Aberforth Partners and Royal London Asset Management in respect of a combined 44.9% of the shares, plus a letter of intent to vote in favour from Schroder's, which owns another 2.98%.