Engineering consultancy RPS Group (LSE:RPS) PLC looks set to succumb to a £591mln knock-out offer from its Canadian rival WSP Group (TSX:WSP).
The deal was pitched at 206p a share – almost double the weighted average price over the last three months.
Unsurprisingly, the stock opened 74% higher but traded just below the offer price. October 2018 was the last time RPS shares changed hands at these levels.
WSP is paying a near 15-times last year’s earnings (EBITDA) – a deal that received the board’s backing.
The Canadians currently have the support of 18% of the group’s shareholder base but will require 75% if it is to get the green light.
The fact the shares are trading at 203p, marginally below the offer price, suggests there is no competing bidder waiting in the wings.