Shares in Lavendon, which hires out aerial work platforms, have slumped nearly 12% after its would-be suitors decided to walk away.
Last week UK group Ashtead and Belgium's TVH Services made a 115p a share, £183m cash offer for Lavendon, topping a previous TVH bid of 111p made in December. But today Ashtead said the two partners had decided not to go ahead with a bid, after Lavendon rejected it as undervaluing the business. Ashtead said:
The approach was subject to...due diligence and the recommendation of the board of Lavendon. Lavendon's rejection means these pre-conditions cannot be fulfilled and as a result the joint acquirers will not proceed with an offer.
With few other likely buyers, we believe Lavendon will now trade closer to fundamental valuations once again. We reduce our target price back to pre-bid levels of 80p and, at current levels, change our recommendation from hold to sell.
On Ashtead, Hector Forsythe at Oriel Securities welcomed the decision not to go ahead with the bid:
We saw the strategic rationale for this move, but of course is comes at a time of improved optimism and therefore price was always likely to be hard to reconcile. We are please to see Ashtead's discipline in setting in the approach such a clear view on value. Attention can now get back to the potential of the opportunity in the US.
