XP Power Ltd on Tuesday confirmed it rejected takeover approaches by New York-listed Advanced Energy Industries Ltd.
The maker of power control systems received approaches valuing it at £17 per share in October, at £18.50 in November and finally at £19.50 two weeks ago.
XP Power confirmed it received ‘a series of highly conditional, opportunistic, indicative proposals from Advanced Energy.’
It said it considered the indicative proposal carefully alongside its financial adviser Rothschild & Co, coming to the unanimous conclusion that it ‘fundamentally undervalues the company and its prospects.’
The company ‘strongly’ advises its shareholders to take no action regarding the indicative proposal.
XP Power added that trading for 2024 has been in line with expectations.
XP Power shares surged 48% to £17.24 each on late Tuesday morning in London, giving it a market capitalisation of £408.3 million. Its market cap was about £276 million before the open.
The latest potential offer valued XP Power at £571 million including debt. It valued its equity at £468 million.
AEI shares were 0.1% higher in pre-market trading at $108.03 each on the Nasdaq, giving it a market cap of $4.04 billion.
AEI said: ‘Each of these proposals has been at a significant premium to the share price at the time of each respective proposal, but the board of XP Power unanimously rejected each of these proposals. Given the lack of engagement from the board of XP Power, Advanced Energy believes that XP Power’s shareholders should be made aware of the latest proposal, which represents a compelling and highly attractive opportunity.’
AEI said a takeover would de-risk XP Power’s standalone business plan and provide additional scale and resources to compete more effectively in the precision power industry. Further, it would create more opportunities for employees’ career advancement and enhance the firm’s position as a strategic supplier with a more comprehensive product portfolio.
It added: ‘Advanced Energy would welcome the opportunity to engage in a constructive dialogue with the board of XP Power and receive access to necessary diligence.’
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