RPS Group shares jump 12% as Tetra Tech outbids WSP for the Oxfordshire-based professional services firm
- RPS Group share price jumped over 12% in early morning trading
- Tetra Tech’s bid is higher than that submitted by WPS previously
California-based group Tetra Tech has agreed a £636million deal to snap up Oxfordshire-headquartered RPS Group.
RPS shares rose sharply today and were up 12.08 per cent or 25.00p to 232.00p in early morning trading.
The US group’s offer has trumped a £591million bid by consultancy giant WSP, which was set to go through after being announced in August.
On the up: RPS Group saw its share price rise sharply in early morning trading today
But Tetra Tech now looks set to be the new owner of RPS, which employs consultants, designers, planners, engineers, and technical specialists across the world providing specialist services to government and private sector clients with a focus on front-end consulting.
The acquisition price represents a premium of approximately 7.8 per cent to the offer price of 206p per RPS share offered pursuant to the WSP Offer. WSP has told investors it is considering its options.
The Tetra Tech deal values the entire issued and to be issued share capital of RPS at around £636million.
Tetra Tech said: ‘The Acquisition Price further represents a premium of approximately 89.7 per cent. to the Closing Price per RPS Share of 117 pence on 8 August 2022 (being the last Business Day prior to the start of the Offer Period).’
RPS employs 5,000 people who will swell Tetra Tech’s overall staff numbers to 26,000.
John Douglas, chief executive of RPS, said: ‘Joining Tetra Tech represents a highly attractive combination of two leading companies in the industry for our clients and provides an ideal opportunity for our people to realise RPS’ goals to meaningfully contribute to the world’s most challenging problems in energy transformation and water management around the world.
‘I am very excited about the future of our combined company and the benefits for our people and clients.
‘By joining together, Tetra Tech provides RPS and its employees with a strong and culturally aligned platform that creates a pre-eminent consulting and engineering firm addressing climate change and all its effects.’
Dan Batrack, Tetra Tech’s chairman and boss, said: ‘The RPS Group advances our long-term strategy to enhance our position as the premier global high-end consultancy in water, environment, sustainable infrastructure and energy transformation.
‘We welcome the RPS Group’s associates to join us and collectively leverage our long-term client relationships and project experience. As a global consultancy with a commitment to high-end solutions, we can offer our expanded team of associates even greater professional opportunities.’
Analysts at Peel Hunt, said: ‘We increase our target price from 206p to 244p (a 10 per cent premium to the Tetra Tech offer) and upgrade our recommendation from Hold to Add. We await further developments with interest.’