The London Stock Exchange’s mid-sized FTSE 250 index is due to lose a 186-year-old manufacturing company to a US takeover – the latest in a series of purchases by foreign buyers in recent years.
Tyman, a FTSE 250 member that makes door and window components, will be bought by its US rival Quanex in a £788m cash and shares deal, the two companies announced on Monday.
Yet another takeover by a US business will do nothing to assuage concerns about the gradual whittling down of the UK’s listed companies – small and large. One concern has been that UK firms are relatively undervalued compared with their American counterparts. That makes it easier for US companies to get a good deal when mounting takeovers.
Other London-listed companies snapped up by US rivals include the FTSE 250 telecoms company Spirent, which is to be bought out for £1.2bn by the electronics testing company Keysight, and the FTSE 100 cardboard box maker DS Smith, which has agreed a £5.8bn deal with Tennessee-based International Paper.
The struggling Hipgnosis Songs Fund is the subject of a bid battle between two US investors, while the self-storage group Lok’nStore was bought this month by Belgium’s Shurgard for £378m.
Russ Mould, the investment director at the investment platform 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.”
Tyman traces the oldest part of its business – the Era brand making door locks – back to 1838. It added the Schlegel door seals brand in 1885, and gradually added a series of companies making locks, handles and seals over the course of more than a century.
However, the Tyman name is relatively new: it was chosen from the Old English word for “to turn” after the venerable manufacturing business was bought out by an investor, Lupus Capital, which then ran into trouble during the financial crisis of 2008.
Monday’s takeover deal is at a 35% premium to Tyman’s share price at the close of trading on Friday. Tyman’s board recommended shareholders accept the Quanex offer.
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The 400p a share offer may be a premium to Tyman’s closing price but it is also short of the prices reached as recently as July 2022. Analysts at Peel Hunt, an investment bank, said it was “not a knockout offer” and suggested some investors could hold out for more.
Nicky Hartery, the chair of Tyman, said: “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.”
