SerpApi.Org
Mitie has agreed to a £3.1billion takeover offer by rival outsourcer OCS Group, which would create one of the UK's largest private sector employers.
It would mean that around 136,000 British workers running cleaning, security and maintenance services in buildings including hospitals and prisons, were employed by an outsourcing giant owned by a US private equity firm.
OCS, which is owned by US private equity giant Clayton, Dubilier & Rice, claims it would create a British firm positioned to ‘support the organisations that keep the country running’.
The deal would make FTSE 250-listed Mitie the latest firm to leave the London stock market, with its board recommending that shareholders accept the cash offer of 221.6p a share, which, with the dividend included, is a 46.8 per cent premium to yesterday’s closing price.
A tie-up would combine OCS’s 50,000 UK employees with Mitie’s 86,000 staff, representing a big chunk of the workforce in essential buildings and infrastructure.
Mitie's board of directors said it considered the terms of the acquisition to be 'fair and reasonable' and plans to vote in favour of the deal.
Chris Rogers, chairman of Mitie, said: 'Having carefully reviewed the offer, the board has unanimously concluded that it represents an attractive outcome for shareholders, delivering the certainty of cash consideration.'
Mitie shares rose 39 per cent to a record high of 210p today.
If the deal is agreed, Mitie will become the latest company to be picked off the London Stock Exchange into the hands of a private rival buyer.
Engineering group Rotork was plucked off the mid-cap index last week for £4.1billion by a Swiss rival.
The deals, combined with an initial public offering drought, are shrinking the London market and adding to concern that foreign predators are exploiting the low valuations among British firms.
Buyers are also circling large cap firms, with Beazley, Schroders and Intertek all falling into private hands.
The Association of Investment Companies this month warned low valuations meant Britain was ‘fertile ground for bargain hunters keen on exploiting the London market’s decline’.
Richard Hunter, head of markets at Interactive Investor, said: ‘The rationale for the deal is self-evident, with a target for a combined British facilities management group which will benefit from the complementary nature of the two businesses.
‘However, from a broader perspective the deal will add grist to the mill on the concerning trend which blights the UK market. Without the added impetus of the technology sector, the UK market has struggled to break free from valuations which are lower both historically and in relation to many of their global peers.'
He added: ‘This has provided an opportunity which many overseas companies have been keen to exploit, resulting in a flurry of takeover activity this year which has tended towards mid-cap stocks, although there are exceptions such as the ongoing Segro tussle.
‘In any event, until or unless UK equities can attain higher valuation levels based on the underlying business and prospects, many will remain vulnerable to further acquisitions, hostile or otherwise.’
The takeover announcement came alongside a first-quarter trading update from Mitie, which showed that revenue rose 10 per cent to £1.4billion. This included 4 per cent organic growth driven by new wins, projects and pricing.
Mitie also hailed a record £32.5billion bidding pipeline, up from £31.7billion at the end of FY26, with more than 70 per cent due to be awarded in the next 18 months.
