13.01.2011

Lavendon rejects Ashtead/TVH

UK based aerial lift rental company Lavendon, has rejected yesterday’s joint approach from Ashtead and TVH worth 115p per share.

A statement from the company says that the Lavendon board of directors believe that the approach is opportunistic and significantly undervalues the company. And as such has no hesitation in unanimously rejecting it.

The statement also says that trading since it issued its interim management statement in mid-November has been satisfactory and that the results for the full year should be in line with its expectations.

Revenues for the second half will be around three percent higher than the previous year, while cash generation has remained strong allowing net debt to be reduced to £140 million, leaving £64 million of borrowings available to draw down in order to take advantage of any opportunities.

The statement adds “Given the group's strong market positions and free cash flows, the board is confident that Lavendon is well placed to deliver significant value to shareholders over the medium term.”
See earlier report

The full response statement is published below:

Vertikal Comment

This response is exactly what we would have expected and it would have been a shock if it had been any different.

The mystery now is what Ashtead has in mind, there is no way it could have imagined anything other response than this and that cannot therefore be the end of it. It would not waste shareholder funds getting involved in such a public ‘adventure’ unless it had several other moves up its sleeve - would it?

It may have had the ‘nod’ from a number of large Lavendon shareholders that such a bid would get their approval – possibly after some further sweetening. But Lavendon is also likely to have ‘touched’ base with some of the same people to take soundings. Mind you forked tongues are a prominent feature of City folk.

Are we seeing a public ‘horse trading’ session here or is it purely an opportunistic punt? Or will we see a white knight come in from outside the region to make a decent bid for the business? It is hard to imagine everything going back to the status quo after such dramatic posturing.

Only time will tell.


RESPONSE TO ANNOUNCEMENT FROM ASHTEAD GROUP PLC ("ASHTEAD") AND TVH SERVICES N.V. ("TVH")

The Board of Lavendon notes the announcement issued today by Ashtead and TVH in relation to their interest in a possible joint cash offer for the Company at 115 pence per share.

The Board believes that the approach from Ashtead and TVH is opportunistic and significantly undervalues the Company. Accordingly, the Board has no hesitation in unanimously rejecting the proposal.

Since the announcement of the Group's Interim Management Statement on 16 November 2010, trading has been satisfactory and accordingly the Board expects the results for the full year to be in line with its expectations.

Group revenues for the 6 months since the half year, excluding ex-fleet equipment sales, increased by 3% over the same period in the prior year, reducing the rate of revenue decline for the year ended 31 December 2010 to 3% (2% on a constant currency basis), compared with the same period in the prior year.

Cash generation has remained strong and the Group's net debt has continued to reduce, slightly ahead of our expectations. As at 31 December 2010, the Group's net debt was £140 million. Lavendon has committed banking facilities in place until September 2013, and the facility headroom at 31 December 2010 was £64 million.

Given the Group's strong market positions and free cash flows, the Board is confident that Lavendon is well placed to deliver significant value to shareholders over the medium term.

This announcement has not been made with the consent of either Ashtead or TVH and there can be no certainty that an offer will be made, nor as to the terms on which any offer might be made.