Vesuvius plc ("Vesuvius") today announces that in the course of the past month it made a preliminary proposal to the Board of Morgan Advanced Materials plc (“Morgan”) for an all-share merger between the two companies. The proposal was rejected by the Board of Morgan without discussions taking place. As a result Vesuvius confirms that it does not now intend to make an offer for Morgan.
The Board of Vesuvius (the “Board”) believes that a combination of the two companies would have created a higher margin global leader in advanced ceramics technology, with complementary business models, strategies and cultures, delivering value-enhancing products and technical services to a broad range of end-markets, and would have delivered:
- enhanced opportunities for top-line growth through:
- the ability to deliver stronger and wider offerings to customers;
- the cross-utilisation of combined technologies and R&D capabilities;
- substantial recurring cost synergies including:
- significant efficiencies in the purchasing of raw materials;
- cost reduction through the rationalisation of local back offices and manufacturing sites given the extensive geographic overlap;
- greater financial strength and scale to:
- support sustainable investment in growth opportunities in existing and new higher margin markets;
- enable a material cash return to shareholders after a merger of the two companies.
The Board therefore believes that a merger would have created a stronger and broader group which would have been even better positioned to compete in the global marketplace.
Vesuvius Chairman, John McDonough CBE, commented:
“We are disappointed that the opportunity to explore the creation of significant incremental value for both sets of shareholders has been rejected. However, the Board has a clearly defined growth strategy for Vesuvius and a track record of delivery. In line with that strategy, we will continue to evaluate compelling opportunities to strengthen the group, whilst continuing to exercise firm capital discipline.”
As a result of this announcement, Vesuvius will, except with the consent of the Panel, be bound by the restrictions contained in Rule 2.8 of the City Code on Takeovers and Mergers (the "Takeover Code"). For the purposes of Rule 2.8, Vesuvius reserves the right to announce an offer or possible offer for Morgan or make or participate in an offer or possible offer for Morgan and / or take any other action permitted pursuant to the Takeover Code within six months of the date of this announcement, in the circumstances described in note 2 to Rule 2.8 of the Takeover Code.
François Wanecq, Chief Executive +44 (0) 207 822 0000
Chris O’Shea, Chief Financial Officer +44 (0) 207 822 0000
John Olsen / Tim Rowntree / Jamie Ricketts +44 (0) 203 128 8100
Source: Vesuvius plc