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(Sharecast News) - Tyman said on Monday that it has agreed to be bought by US metal window and door manufacturer Quanex in a £788m cash and stock deal.
Under the terms of the acquisition, Quanex will pay 240p per share in cash and 0.05715 of a new Quanex share, which is equivalent to 160p.
As an alternative to the main offer, Tyman shareholders could choose to receive shares in Quanex at a ratio of 0.14288 of a new Quanex share to every one Tyman share. This would also value each Tyman share at 400p.
The price represents a premium of around 35.1% to the closing share price on Friday.
Nicky Hartery, non-executive chair of Tyman, said: "This transformative and complementary transaction will strengthen the enlarged business for the benefit of all our customers, employees and other stakeholders.
"In the context of a rapidly evolving North American marketplace, our board ultimately determined that this transaction is the best path to maximising value for Tyman shareholders, who will be able to realise a meaningful portion of their holding in cash at a significant premium to the prevailing share price while also participating in the future upside of the enlarged group.
"Today marks the beginning of an exciting next chapter for Tyman and our talented employees, and we look forward to joining with Quanex to deliver future growth and success."
Tyman said it had received an irrevocable undertaking from Teleios Capital Partners, which owns a 16.4% share in the group, to vote in favour of the deal.
Benjamin Schmid, investment director at Teleios, said: "As a longstanding shareholder of Tyman, Teleios supports Quanex's proposal, which will create a stronger, combined platform of scale, with significant potential to both consolidate and establish leadership positions in existing and adjacent markets."
At 1045 BST, the shares were up 31% at 388p.
Russ Mould, investment director at AJ Bell, said: "While individually this deal may not make much of a ripple, when you consider the sheer volume of firms being snapped up by overseas buyers, the UK market is experiencing death by a thousand cuts."
Jefferies, which rates Tyman at 'buy', said: "The offer by Quanex comes at a healthy premium (35% to Friday's close price), and the implied value per share of 400p is a circa 11% premium to our price target of 360p per share and a circa 13% premium to consensus price targets of 354p, and on our forecasts, values the company at 10x FY24F EV/EBITA & 1.3x EV/sales.
"As such, we believe the offer should be attractive to Tyman holders (particularly given current market conditions), despite the consideration that receiving US-listed shares may not be ideal, and we don't foresee many major holdouts."