Spectris shares pop as KKR responds to Advent bid

(Sharecast News) - Shares in instrumentation business Spectris were up more than 15% in early trading after a bidding war between Advent and KKR started to heat up. Private equity investor Advent said on Monday that it had reached an agreement on the terms of a recommended cash acquisition.

Advent will pay £37.63 for every Spectris share, including £37.35 in cash from Bidco and an interim dividend of 28.0p, representing an "attractive premium" of approximately 84.6p to its closing price on 6 June and valuing the business at approximately £3.8bn.

However, Kohlberg Kravis Roberts & Co, which has been engaging constructively with Spectris since submitting its first proposal on 2 June, later confirmed that while no revised proposal has yet been made, it was "actively engaged" in the advanced stages of due diligence and arranging financing commitments.

KKR also strongly encouraged Spectris shareholders to take no action with regard to the Advent offer.

AJ Bell's Russ Mould said: "Advent has struck a deal to buy Spectris at a chunky premium to the market value before bid interest was revealed earlier this month. Spectris' board has recommended the all-cash offer and it's now up to shareholders to vote on it. KKR has already expressed interest in Spectris and will need to make a formal offer fast if it stands a chance of derailing the Advent bid.

"The fact we've got two bid battles in Spectris and Assura just goes to show how the UK stock market continues to be on sale. If investors don't recognise the good value opportunities on offer, trade buyers or private equity firms will keep swooping on targets and pick them off one by one."

As of 1310 BST, Spectris shares had rallied 15.48% to 3,790.20p.

Reporting by Iain Gilbert at Sharecast.com