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Tanfield shares soar after Smith Electric approach for Zero Emission Vehicles division

10th Mar 2010, 5:34 pm
Tanfield shares soar after Smith Electric approach for Zero Emission Vehicles division

Shares in Tanfield Group PLC (AIM: TAN) soared in morning trade after the engineering group announced it received a non-binding, conditional offer from Smith Electric Vehicles US Inc (SEVUS) for the company's Smith Electric Vehicle division.

Tanfield’s operations are split into two divisions: Powered Access and Zero Emission Vehicles, the former is a manufacturer of aerial lifts while the latter makes commercial electric vehicles which are sold under the Smith Electric Vehicles brand.

SEVUS is offering £37 million in cash, equivalent to 50p per existing Tanfield share, and an additional £33.3 million contingent credit to the benefit of Tanfield in any SEVUS IPO offering prior to September 2015, equivalent to up to 45p per existing Tanfield share.

SEVUS plans to acquire the entities comprising the Smith Electric Vehicle division; Tanfield’s 49 percent shareholding in SEVUS and the license agreement between Tanfield and SEVUS and the intellectual property necessary for the operation of the Smith Electric Vehicle division on a global unrestricted basis.

The board of Tanfield has granted SEVUS a four month period of exclusivity for the clarification and negotiation of this offer. Any sale would be conditional upon negotiation of sale and purchase documentation, a financing by SEVUS, all usual shareholder approvals, including the approval of Tanfield shareholders, and due diligence.

The board is examining tax efficient methods that would return as much of the cash from any sale to shareholders as possible.

There can be no assurance that an agreement can be reached on these terms, or at all, or that SEVUS will be able to complete the financing required, Tanfield added.

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