Vesuvius says RHI bid deadline extended after "reasonable" progress

Vesuvius PLC on Tuesday said the deadline for a possible bid from RHI Magnesita NV has been extended, as it disclosed a "reasonable level of progress" has been made in talks between the two.

Late September, London-based engineering company Vesuvius said it had received a £1.37 billion bid from Vienna-based refractory products maker, RHI.

The proposal, which was made in August, was 470 pence per share and 0.28 new RHI shares for every 10 Vesuvius shares, for a total value of 551 pence per Vesuvius share.

At the time, Vesuvius said it was "evaluating the latest proposal carefully".

Late Tuesday, Vesuvius said there has been a period of "substantive engagement" with RHI to assess whether a "satisfactory position can be reached regarding the execution risks and financial terms associated with a potential offer".

Vesuvius said a "reasonable" level of progress has been made in relation to the execution risks, and a headline agreement has now been reached on a disposal revenue threshold with respect to any potential remedies to be offered by RHI to satisfy certain anti-trust conditions, together with a related reverse break fee.

"However, material further work is still required," Vesuvius stressed.

To allow time for this, Vesuvius requested, and the Panel on Takeovers & Mergers consented to, an extension to the put-up-or-shut-up deadline.

RHI now has until November 24 to make a firm bid proposal for Vesuvius.

In a separate statement, RHI said Vesuvius' largest shareholder, Cevian Capital II Master Fund LP has extended its irrevocable undertaking in support of an offer by RHI to align with the new deadline.

"The extension of the PUSU deadline and the ongoing support of Cevian is reflective of the substantial progress over recent weeks in arriving at a mutually acceptable position, in relation to a possible offer. RHIM remains committed to engaging constructively with the board of Vesuvius with a view to agreeing the terms of a recommended transaction," it added.

Shares in Vesuvius were up 1.8% at 469.40p each in London on Wednesday. RHI traded down 0.9% at 2,670.00p.

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