TT Electronics shares surge after Volex Group makes £248.6m takeover offer

'Despite the resilience of TT Electronics’ underlying business, it has faced persistent challenges in recent years'

Lord Nat Rothschild’s Volex group has made a £250m bid to acquire TT Electronics, criticising the company's leadership for "missteps".

The news sent shares in the Woking-based TT Electronics up by over a third. Specialising in power products essential for devices ranging from hospital ventilators to electric cars and laptops, Volex has put forward two takeover attempts.

Their latest offer values TT Electronics at £248.6m, or 139.6p per share, which is more than three quarters above Thursday's closing price.

However, TT Electronics' board has rejected each of its proposals, said Volex. TT Electronics, known for engineering and manufacturing electronics crucial for industries including healthcare and aerospace, boasts clients like BAE Systems and Thales, with operations spanning the UK, North America, and Asia.

Lord Nat Rothschild, the executive chairman of Volex, said combining the two companies would create a strong leader in the specialist electronics market. The prominent businessman is a member of the well-known Rothschild banking dynasty and son of financier, Lord Jacob Rothschild, who died in February.

He said: "Despite the resilience of TT Electronics’ underlying business, it has faced persistent challenges in recent years, which Volex believes have been exacerbated by execution missteps by the board, including former and current executive leadership. As a result TT Electronics’ shares are trading at a 10-year low."

The share price of TT Electronics was around 109p per share on Friday, marking the lowest since approximately 2014. The manufacturer's acquisition strategy was also criticised for leading to "very disappointing outcomes", and it was noted that the firm had "delivered a series of inconsistent annual results".

In September, TT Electronics alerted investors about production issues at its US factories which are expected to impact yearly sales and profits. It revealed that a series of orders in its American components business had been deferred to 2025, instead of 2024 delivery, which would affect earnings within its North American division.

However, it sought to reassure investors that it was taking measures to rectify the operational issues, including enhancing the layout and planning of its factories. Lord Rothschild described its second proposal as an "extremely compelling alternative to the status quo" and encouraged the company’s board to engage with Volex.