VT Group continued to resist takeover interest today after rival Babcock International upped its offer for the services firm to more than £1.2bn (€1.4bn).
The cash-and-shares approach from Babcock significantly undervalues VT and its prospects, the former Vosper Thornycroft business said.
It is the second rejection of the week after VT said on Monday it had turned down a proposal worth £1.1bn (€1.3bn) from Babcock, which employs around 17,000 people worldwide and generated revenues of almost £2bn (€2.3bn) last year. The support services firm also made two approaches to VT last year.
VT, based in Southampton in England said: “The board of VT considers that the company will produce higher growth and better returns for shareholders as an independent business pursuing its support services growth strategy.”
VT has takeover ambitions of its own after this week upping its bid for outsourcing and engineering firm Mouchel to £330m (€380m).
The company is on the hunt for acquisitions after building up a war chest of £500m (€576m), largely thanks to the £346m (€399m) sale of its 45% holding in BVT Surface Fleet naval shipbuilding to joint venture partner BAE Systems.
That move came as part of a planned exit from shipbuilding to focus on its services businesses, covering defence, communications and education and skills.
It also reduced the company’s exposure to Ministry of Defence spending, which it believes could be susceptible to budget cutbacks following the election. VT warned this would not be the case if its shareholders became part of the enlarged Babcock company.