Ricardo joins City exodus as Canada's WSP agrees £363m takeover
British consultancy group Ricardo is being acquired by Canadian rival WSP Global for around £363.1million, including debt.
The deal announced on Tuesday marks the latest foreign takeover blow to the London Stock Exchange, whose companies are increasingly vulnerable to opportunistic bids.
It came on a busy day for takeover talk in London with NHS landlord Assura accepting a 'best and last' takeover bid worth £1.7billion, while tech firms Craneware and GlobalData called time on negotiations with respective suitors.
Shareholders in Ricardo, which provides strategic, environmental and engineering consultancy to the transport and energy sectors, will receive 430p in cash per share, representing a 28.4 per cent premium to its closing price on 10 June.
WSP, which was listed in London until being acquired by Genivar in 20212, said it had secured support from shareholders for the deal.
This including letters of intent from Gresham House, Aberforth Partners and Royal London Asset Management, which cover around 48 per cent of Ricardo's share capital.
Ricardo had been under pressure from rival and investor Science Group, who had been pushing for a sale or breakup of Ricardo amid calls to oust Chairman Mark Clare and other directors, citing underperformance and structural inefficiencies.
Ricardo shares rose 24.96 per cent or 83.63p to 418.63p on Wednesday, having fallen around 14 per cent in the last year.
Mark Clare, chair of Ricardo, said: 'WSP has made a compelling offer which represents a highly attractive premium to recent average trading levels and provides certain value in cash today for Ricardo shareholders.
'Importantly, the Ricardo Directors believe that the Acquisition will provide enhanced career opportunities for Ricardo's employees within the WSP Group as well as access for our clients to a broader service offering.'
Separately, Science Group, Ricardo's second-largest investor with a 21.76 per cent stake according to LSEG data, said on Wednesday it would sell a 20 per cent stake to WSP for around £53.5million.
Investment director at AJ Bell Russ Mould calculates a £53.5million profit on the sake.
He said: 'Not bad for a business that's only worth £234million.
'Science Group had rattled the cage and got in a public spat with Ricardo, accusing it of poor operating performance and ineffective governance. Its profitable campaign now puts Science Group on the radar as an activist investor to watch closely.'
Mould added: 'Canadian rival Genivar bought WSP in 2012 as a way of getting a strong foothold in the UK market and subsequently adopted its name. It has continued to grow in size and Ricardo looks to be an ideal fit for the group.
Earlier this week, London-listed Alphawave confirmed it had reached an agreement with American chipmaker Qualcomm in a cash and shares deal that valued the company at around £1.8billion.
That deal announcement was quickly followed by quantum computing business Oxford Ionics, which signed a deal to be taken over by New York-listed rival IonQ.
Spectris also saw its shares surge this week after the firm revealed it had received a £3.7billion takeover offer from US private equity company Advent. Spectris said it was minded to accept the proposal.
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