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Spectris and Oxford Instruments merger could create new FTSE 100 company

By Stephen Emerson
28 February 2022

A proposed merger between high tech engineering giants, Oxford Instruments and Specrtris, would create a market capitalisation within FTSE 100 limits.

The merger would give the new entity a combined market capitalisation close to £4.6m with the lowest entry by market  capitalisation in the FTSE 100, steel manufacturer Evraz Plc, currently sitting at early £3m meaning that it could be considered for admittance.

Oxford Instruments announced today that it was considering a cash and share takeover offer from Surrey-based Spectris which would value each share in the Abingdon firm at £31.00.

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Under the proposal, Oxford Instruments shareholders would receive £19.50 in cash plus £11.50 in new Spectris shares for each share that they own.

Specrtris  provides high-tech instruments, test equipment and software with Oxford Instruments operating in a similar sphere through its supply of high technology tools and systems for research and industry.

Andrew Heath, Chief Executive of Spectris, said:

"Spectris has been significantly strengthened in recent years through progress against our Strategy for Profitable Growth, delivering a more focused, profitable business supported by a strong balance sheet.

"Our recent financial results demonstrated continued strong organic growth, expanding margins, and a healthy order book. Following a series of successful divestments under this strategy, we have been actively exploring opportunities to re-invest in acquisitions that have a strong strategic, financial and cultural alignment to our business and that will enhance and accelerate our growth opportunities.

"A combination of Spectris and Oxford Instruments would bring together two highly complementary businesses and create a leading global player in precision measurement. Oxford Instruments' highly attractive, differentiated technologies are leaders in their fields and, combined with our own, will deliver a significantly enhanced value proposition for customers.

"The Spectris Board believes that a combination of our businesses will deliver a stronger future for both companies as a UK champion in the high technology instrumentation sector, and create immediate and long-term value for shareholders."

The latest offer from Spectris follows earlier approaches for  Oxford Instruments with the last being made earlier this month.

Talks between both parties remain ongoing with Oxford Instruments having a deadline of March 28 to respond to the takeover bid.

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