Babcock's VT pursuit pays off

The former Vosper Thornycroft business had previously resisted Babcock's approaches, but said the recommended cash-and-shares offer was "fair and reasonable".

VT chairman Mike Jeffries said: "The VT board believes that Babcock's offer represents an attractive proposition for VT shareholders both through the immediate offer premium and through the opportunity to benefit from the synergies available from combining our two businesses."

Babcock, which employs around 17,000 people worldwide and generated revenues of almost 2bn last year, has seen several approaches to VT snubbed in the past.

Babcock made two offers in February of 1.1bn and 1.2bn, but was accused by VT of significantly undervaluing the business.

But yesterday VT accepted the revised bid and said directors would unanimously recommend that shareholders vote in favour of the deal, which could be completed by the end of July.