Babcock Raises Bid For VT Group

Babcock Raises Bid For VT Group
February 18, 2009

LONDON (Dow Jones)--Babcock International Group PLC (BAB.LN), an engineering support services company announced Thursday it rised its bid for VT Group PLC (VTG.LN), to an new value range of between 680 pence and 715 pence per VT share.

MAIN FACTS:
-The revised proposal represents a significant improvement to the terms set out in Babcock's previous proposal to VT.
-The revised proposal is depending on the value of merger benefits identified during the required due diligence process. This range

represents:
-*a premium of between 33.9% and 40.7% to VT's mid-market closing price of 508 pence per share on Feb. 12, 2010 (being the last full trading day prior to the announcement by Babcock of a possible offer for VT)
-*an exit multiple of 20.4 - 21.4 times VT's historic earnings
-*excluding the BVT Exit Proceeds, a premium of 45.1 - 54.2% to the value of the current ongoing operations of VT
-The consideration would comprise a mixture of cash and Babcock shares, with an exchange ratio of 0.701 Babcock shares for each VT share and the balance in cash.
-In view of the strategic logic, The company believes that the proposed combination represents a compelling growth story and provides an opportunity which should be explored in full by both companies.
-Babcock is committed to working towards a recommended transaction and establishing a constructive dialogue with VT. Babcock believes there to be significant commercial logic underpinning the combination of the two companies, and that it remains in the interests of VT shareholders for the Board of VT to engage with Babcock.
-Babcock is disappointed that the Board of VT has to date been unwilling to do so.

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Babcock International Group PLC (London: BAB), VT Group (London: VTG)