British automotive elements maker TI Fluid Systems approves £1bn takeover supply from Canadian agency

TI Fluid Systems has become the latest major British firm to strike a takeover deal with a foreign company this week.

The car parts supplier revealed it had accepted a £1billion offer from Canadian rival ABC Technologies, which makes vehicle components, including defrosters, door panels, and fuel tanks, for some of the world’s largest automakers.

ABC said the acquisition would bolster its product portfolio and presence across core automotive markets in Asia, Europe and the Americas. 

Under the terms of the transaction, TI’s investors will receive 200 pence per share, a 47.3 per cent premium to its closing share price of 135.8p on 12 September, the final day before the current offer period began.

ABC made two unsolicited bids for the business earlier this summer worth 165p and 176p per share, respectively, but TI turned both down for being too low.

Last week, the City’s Takeover Panel extended the deadline for ABC to make a ‘put up or shut up’ offer for the Oxford-based group to 5pm today. 

Acquisition: Car parts supplier TI Fluid Systems has become the third major British business this week to strike a takeover deal with a foreign company 

Both companies expect the acquisition to be finalised in the first half of 2025, subject to approval from TI shareholders representing at least three-quarters of votes.

Tim Cobbold, chair of TI Fluid Systems, said the enlarged business would be ‘better positioned to navigate the current challenges facing the automotive industry and deliver sustainable long-term growth.’

He added that the offer ‘represents an attractive premium and provides shareholders with the certainty of a cash consideration that reflects TI Fluid Systems’ fundamental strengths and opportunities, while also acknowledging the wider industry uncertainties.’

While officially founded in 2000, TI’s roots can be traced back to the Bundy Corporation, which was set up in 1922 and supplied fuel lines for the Ford Model T.

TI’s takeover announcement comes just one day after the waste management company Renewi approved a £700million offer from Australian asset manager Macquarie.

Cosy Club operator Loungers also said yes to a £351million bid from Majestic Wines owner Fortress Investment Group.

London-listed firms are often considered attractive takeover targets due to a perception that they are undervalued relative to their global peers. 

Cybersecurity specialist Darktrace, video games services provider Keywords Studios, and music rights investor Hipgnosis Songs Fund have all fallen into overseas ownership this year.

Investment platform Hargreaves Lansdown, soft drinks producer Britvic, and Royal Mail owner International Distribution Services have also made billion-pound takeover deals.

Dan Coatsworth, investment analyst at AJ Bell, said: ‘Like many other takeover targets over the past few years, TI Fluid struggled to generate much excitement among investors and traded on the type of valuation that left it vulnerable to a bid. 

‘The shares have traded below eight times 12-month forward earnings since 2022, which put TI Fluid in bargain basement territory. It was only a matter of time before someone gobbled it up.’

TI Fluid Systems shares were 1.8 per cent up at 192.6p on late Friday afternoon.