Quanex to buy U.K. rival Tyman in $1.1 billion takeover that would yank company off London Stock Exchange

By Louis Goss

Texan building supplies company Quanex said Monday it had agreed to buy British firm Tyman for $1.1 billion in a deal that would see another U.K. firm pulled off the London stock exchange through a takeover by a U.S. rival.

The deal would see Quanex merge with London-headquartered Tyman to create an Anglo-American construction-supplies seller with around $30 million a year lower costs and approximately $2 billion in annual sales.

Under the terms of the deal, which values Tyman at $1.1 billion, shareholders in the British company will receive payouts worth 400 pence per share, which marks a 35.1% premium on the FTSE-250 company's closing share price on April 19, 2024.

Shares in Tyman (UK:TYMN) increased 31% on Monday having previously gained 21% in the 12 months leading up to the announcement of Quanex's offer. Quanex's (NX) New York-listed shares increased 1% on Monday, after a gain of 70% over the previous year.

Quanex submitted two offers, including a main offer - which would see it pay 60% of the $1.1 billion sum in cash the rest in the form of shares in the Texan company - and a secondary that would see Tyman shareholders paid entirely in Quanex shares.

Tyman was first founded as a property-development company in 1993 before listing on the London Stock Exchange in 1999 and later pursuing a series of acquisitions that transformed it from a financial conglomerate specializing in industrials to a major supplier of door and window components to the construction industry.

Quanex traces its origins back to the formation of the Michigan Seamless Tube Company in 1927 before it undertook a series of acquisitions that turned it into a top supplier to the building industry.

If approved by shareholders and regulators, the acquisition will see another British company pulled off the London stock exchange, following a series of exits over the previous year driven by low valuations and a flurry of M&A deals.

Last week, clothes seller Superdry became the latest firm to announce its plans to de-list from the London Stock Exchange, with a view to cutting costs and pursuing a major turnaround "away from the heightened exposure of public markets."

Earlier this year, German travel agent Tui called on shareholders to support its plans to de-list from the London Stock Exchange and shift its primary listing to Frankfurt, to boost its share price and liquidity.

This month, analysts at Peel Hunt led by Charles Hall said a flurry of M&A deals, driven by U.S. firms seeking out bargain-priced U.K. companies, will see the FTSE SmallCap Index of stocks entirely depleted by 2028 if takeovers continue at their current pace.

-Louis Goss

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04-22-24 0708ET

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