Morning:
6°c
The bidding war for Spice, the support services firm that installs most of the UK's water meters, hotted up today when it revealed that its private equity suitor Cinven was in talks about upping its bid to as much as £246 million.
Spice said it was in "advanced discussions" with Cinven about a cash offer of 70p per share, and had stopped talking to other interested parties. The board said that it would tell shareholders to back a 70p offer.
"Although the board believes that the company has a strong future as an independent business, because of the cash nature and premium of the potential offer, it is in shareholders' interests to facilitate further discussions with Cinven," Spice said.
The talks mark Cinven's third approach for Spice, and suggest its hardball approach is paying off. The European buy-out house first bid 56p per share in May, then went up to between 62p and 65p per share in July. Yesterday, when Spice held its AGM, it announced that it was in talks with a second potential bidder, which seems to have spurred Cinven to action.
Spice shares, which rose 12% yesterday as traders anticipated a bidding war, rose 6.3% to 67.25p.
