Lord Nat Rothschild’s Volex group has made a potential offer worth £250 million to buy TT Electronics, which he said has been troubled by “missteps” taken by its leadership team.
Shares in Woking-based TT Electronics soared by more than a third following the announcement.
Volex, a company specialising in providing power products for equipment like hospital ventilators, electric cars and laptops, said it had submitted two takeover proposals.
The latest bid values TT Electronics at £248.6 million, equivalent of 139.6p per share, representing a premium of more than three quarters to its closing price on Thursday.
Despite the resilience of TT Electronics' underlying business, it has faced persistent challenges in recent years
The board of TT Electronics has declined to engage with the group and rejected each of its proposals, Volex said.
TT Electronics engineers and manufactures electronics to support sectors from healthcare to aerospace, with customers including BAE Systems and Thales, and factories and offices in the UK, North America and Asia.
Lord Nat Rothschild, the executive chairman of Volex, said combining the two companies would create a strong leader in the specialist electronics market.
The prominent businessman is a member of the well-known Rothschild banking dynasty and son of financier, Lord Jacob Rothschild, who died in February.
He said: “Despite the resilience of TT Electronics’ underlying business, it has faced persistent challenges in recent years, which Volex believes have been exacerbated by execution missteps by the board, including former and current executive leadership.
“As a result TT Electronics’ shares are trading at a 10-year low.”
TT Electronics’ share price was about 109p per share on Friday, the lowest price since roughly 2014.
He also criticised the manufacturer’s acquisition strategy for resulting in “very disappointing outcomes” and said the firm had “delivered a series of inconsistent annual results”.
TT Electronics warned investors in September about production issues at its US factories which are set to drag on yearly sales and profits.
It said a string of orders in its American components business had been pushed into 2025, rather than for 2024 delivery, which would hit earnings within its North American division.
However, it moved to reassure investors that it was taking action to fix the operational issues, including improving the layout and planning of its factories.
Lord Rothschild said its second proposal was an “extremely compelling alternative to the status quo” and urged the company’s board to engage with Volex.
