Mitie Group PLC (LSE:MTO) has agreed a recommended £3.1 billion cash takeover by OCS Group International, valuing the FTSE 250 facilities management group at up to 221.6 pence a share.
It marks the latest in a wave of takeovers targeting mid-cap London-listed companies, coming days after Swiss engineering group ABB agreed a £4.1 billion swoop on Bath-based valve maker Rotork.
The flurry of bids has intensified concern in the City that overseas and private buyers are exploiting the relatively low valuations of UK firms.
More than 150 takeover bids worth over £100 million each have targeted London-listed companies since the start of 2023.
The offer for Mitie, comprising 218.5 pence in cash plus a final dividend of up to 3.1 pence, represents a 44.7% premium to Mitie's closing price of 151 pence on 20 July.
The shares rose 40% to 211p in early trading.
OCS is a fellow outsourcer that provides cleaning, security and maintenance services.
After the proposed deal, the enlarged group would have combined revenues of about £8.5 billion for the calendar year to 31 December 2025.
It would rank among the UK's largest private sector employers, serving government, defence, healthcare and infrastructure clients.
Mitie directors, advised by Ardea Partners and Peel Hunt, unanimously intend to recommend the offer, having judged the terms fair and reasonable.
They have given irrevocable undertakings over their own holdings, representing about 1.2% of the share capital.
OCS has also secured a commitment relating to hedge fund Oasis Management's interest in swaps over 9.9% of Mitie's shares.
Mitie chairman Chris Rogers said the offer recognised the strength of the business and delivered the certainty of cash while positioning it for further growth.
Chief executive Phil Bentley said the deal reflected the strength of Mitie's brand, capabilities and reputation, and would create a stronger platform to invest in people, technology and services.
OCS chief executive Rob Legge said the combination would build a British facilities management group better placed to support the organisations that keep the country running.
Panmure Liberum told investors: "It seems likely that this bid will proceed on these terms. There is a remote risk of a counter from an interloper. It is yet another reminder, if needed, of the attractions of business services companies to buyers, in this case trade."
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