Bullish cables group launches £248m takeover bid

Sparking Power to offer 175p a share for Volex

Bullish cables group Sparking Power has launched a £248m takeover bid for Volex, the FTSE 250 maker of electrical components and cables. It is learnt that Sparking Power is offering 175p a share, a 15pc premium to Volex's share price of 152.2p on Friday. The two companies have been in talks since Christmas, with Sparking Power being granted due diligence just last week.

The deal would create one of the largest electrical equipment groups in Europe, with a combined market value of around £500m. Sparking Power is a privately owned group that employs 1,900 people in more than 20 countries. It supplies cables, connectors, and other components to a range of industries, including construction, mining, and renewable energy. Volex is a global manufacturer of electrical components and cables, with a market capitalization of about £250m. It employs 2,400 people and has operations in 22 countries.

A source with knowledge of the bid said that Sparking Power’s approach had been “opportunistic”.

“They see Volex as a well-run business with a strong brand and good customer relationships. They believe that they can add value by leveraging their own global reach and product portfolio.”

The deal is subject to regulatory approval, but it is understood that Sparking Power is confident of winning clearance from competition authorities. The company is said to have a “strong war chest” and is willing to walk away if the price becomes too high.

Volex shares rose by more than 15pc in early trading on Monday, suggesting that investors were positive about the prospect of a takeover. The company’s board is expected to issue a formal statement on the bid later today.