Babcock confirms talks ongoing over Peterhouse acquisition

Babcock has confirmed that it is the mystery player chasing Peterhouse. It values Peterhouse at £106m.

In an announcement on the Stock Exchange this afternoon (Friday), Babcock confirmed that it is in discussion and that its bid, if made, would be at the price of 220p per share.

A Babcock statement added: "On the basis of the expected synergies, the acquisition is expected to be earnings enhancing pre goodwill in the first full financial year following the completion of the acquisition.

"At this stage it is by no means certain that an offer will be forthcoming. A further announcement will be made in due course."

Babcock would pay for the take-over by issuing new shares to cover 70% of the price and by borrowing extra cash to cover the 30% balance.

The bid represents a premium of 57% over the average value of Peterhouse shares between 1 December 2003 and 30 January 2004, the last trading day prior to the announcement by Peterhouse that it had received an approach.