VT Group opens books to Babcock

VT Group has bowed to shareholder pressure and opened its books to Babcock, the defence engineering firm that tabled a £1.25bn offer for the firm last month.

The move follows an announcement from VT earlier in the morning that it was shelving its own pursuit of consultant Mouchel.

In a statement to the City, VT said:  “VT Group confirms that it has agreed a basis for a mutual exchange of information. The terms of any transaction, including price, have not been agreed at the time of this announcement. There can be no certainty that any such agreement will be reached or that a formal offer for VT will be made. A further announcement will be made in due course.”

The announcement sent VT shares up by more than 10p to 687p.

The move will come as a blow to the VT management team, led by chief executive Paul Lester, who had previously rebuffed the advances of Babcock. They had instead insisted a tie-up with Mouchel would be in the best interest of the company.

But following pressure from large shareholders, including Scottish Widows, which has stakes in VT and Babcock, VT has been forced to allow Babcock access to its books, which could be the prelude for any takeover.