TI Fluid Systems rejects bids from Canadian rival

Car parts supplier TI Fluid Systems has revealed it rejected a second takeover offer last week from a Canadian rival.

ABC Technologies declared it made a 165p per share offer for the Oxford-based firm on 22 August before upping it to 176p per share earlier this month after TI Fluid’s board turned down the original proposal.

The second bid represents a 35 per cent premium to TI Fluid’s closing share price prior to the offer period commencing.

Not going anywhere: Car parts supplier TI Fluid Systems rejected a second takeover offer last week from a Canadian rival 

However, TI Fluid’s bosses unanimously dismissed this latest proposal, saying it still ‘significantly undervalued’ the business and its prospects.

ABC, which is backed by Apollo Global Management, nonetheless said it ‘remains interested’ in a possible transaction and is ‘considering its position.’

‘There can be no certainty that an offer will be made, nor as to the terms on which any offer might be made, even if the pre-conditions are satisfied or waived,’ the group added.’

Founded in 1974, ABC supplies vehicle parts such as defrosters, floor consoles, fuel tanks, cladding, and door panels to many of the world’s largest carmakers.

If it acquires TI Fluid, it would be the latest takeover deal this year involving a foreign company snapping up a prominent publicly-traded British business.

Just last week, Johannesbourg-based AngloGold Ashanti agreed to buy fellow gold producer Centamin for around £1.9billion.

Other deals struck in recent months include Carlsberg’s £3.3billion bid for soft drinks maker Britvic, Thoma Bravo’s £4.3billion offer for cybersecurity giant Darktrace and Blackstone buying music rights investor Hipgnosis Songs Fund.

ABC now has until 12 October to put forward a concrete offer for TI Fluid or walk away.

But TI Fluid said they were ‘confident in the strategy and prospects’ of the firm and ‘strongly urges shareholders to take no action at this time. 

‘A further announcement will be made if and when appropriate.’

The group went public in 2017 when its former majority owner, investment giant Bain Capital, decided to list it on the London Stock Exchange.

Russ Mould, investment director at AJ Bell, notes the company has struggled since then amid market uncertainty caused by the transition to electric vehicles.

He said the rise of EVs ‘makes it difficult for TI Fluid’s clients to make investment decisions, even if TI Fluid has worked hard to make itself ‘propulsion agnostic’ – i.e., it doesn’t matter if the demand comes from EVs or traditional petrol vehicles.

‘Against this backdrop, shareholders may conclude they are best taking the money on the table from ABC, but this would mean a further thinning of the ranks of a UK market which has been picked apart in recent years by overseas predators.’

TI Fluid Systems shares jumped 13.3 per cent to 165.2p by lunchtime on Monday, making them the biggest FTSE 250 riser.