Shares in temporary power provider Aggreko (AGK) climbed as much as 37% to 866p after the company confirmed press speculation that it was in talks with potential US private equity buyers.
According to the press release, a consortium of TDR Capital and I Squared Capital had made ‘a series of proposals’ to the group which culminated in Aggreko entering into discussions regarding a possible all-cash offer for the company at 880p per share, adjusted for any dividend declared or paid.
The firm said discussions were ongoing, adding the usual disclaimer that there was no certainty the consortium would make an offer.
Just over a fortnight ago Aggreko reported that thanks to a ‘continued recovery in activity levels across a number of our markets’ it expected to deliver a pre-tax profit slightly above the top end of its previous guidance range of £80 million to £100 million.
It also forecast a pre-tax profit for the current financial year of between £170 million to £190 million. At the middle of that range, the 880p per share offer received today would value the business at between 12 and 13 times pre-tax earnings or £2.25 billion.
Key to Aggreko’s earnings this year is a successful staging of the summer Olympic Games in Tokyo, which were postponed from last year due to the pandemic.
At the start of the year the company confirmed it had completed and signed new contracts to supply temporary power to the event worth $315 million.
