Lavendon Group Plc, Europe’s biggest rental company for truck-mounted lifts, fell the most in almost five months in London trading after Ashtead Group Plc and TVH Services NV said they won’t make a takeover bid.
Ashtead, the third-largest U.S. and U.K. construction equipment-rental company, and TVH, its closely held Belgian counterpart, approached Lavendon on Jan. 12 seeking recommendation of a cash offer of 115 pence a share. The two companies said in a statement today that, because Lavendon refused to cooperate, they won’t make a firm offer.
“It was a lowball price, 166 pence would be a much fairer price,” Andy Murphy, an analyst at Singer Capital Markets Ltd., who recommends investors buy the shares, said in an interview. “Lavendon is an attractive business and many of the risks people were talking about even six months ago have gone.”
It is the third time TVH has sought to get Lavendon’s agreement to a takeover. It made the first two approaches on its own and the Takeover Panel ruled Jan. 12 that TVH had until Feb. 8 to make a firm offer or withdraw its proposal.
“I’m delighted that this uncertainty has been removed,” Lavendon Chairman John Standen said in a Regulatory News Service statement. “We have a clear set of objectives to enhance shareholder value and Lavendon is very well positioned.”
Ashtead and TVH had said recommendation from the Lavendon board and access to its books were non-waivable conditions. Lavendon, based in Lutterworth, central England, rejected the bid the next day, describing it as “opportunistic.”
“Lavendon’s rejection means these preconditions cannot be fulfilled and as a result the joint acquirers will not proceed with an offer,” they said in a statement distributed by the Regulatory News Service.
Lavendon fell 12 pence, or 11 percent, to 97.25 pence, the biggest fall since Aug. 27 and the lowest closing price since Dec. 2, the day before TVH first disclosed its interest in acquiring the company. Lavendon now has a market value of 160 million pounds ($256 million). The decline pared its six-month gain to 75 percent.
Ashtead gained 11.1 pence, or 7 percent, to 170.3 pence, the biggest gain since Dec. 9. It’s surged 93 percent in the last six months.
Some investors in Ashtead, which generates 80 percent of its revenue and almost all of its earnings in the U.S., don’t want the company to expand in the U.K., Murphy said.