The endlessly-flagged bid for Dowty Group Plc finally arrived yesterday when one of the most fancied runners in the bid stakes, TI Group Plc, offered about #518m in paper – four new TI shares for every 15 Dowty ordinaries, and 45 new shares and #105.25 cash for every 400 of Dowty’s convertible preference shares with a cash alternative of 175 pence a share and 100 pence for the convertibles. TI immediately said that it wanted to sell off the Information Technology division, consisting primarily of the Case Group Plc data communications equipment acquisition – the story in the market at the end of last year was that Cray Electronics Holdings Plc had already been lined up as a buyer for the business if TI – the former Tube Investments – made a bid (CI No 1,805). TI also revealed that it had approached Dowty last year with the offer of a friendly merger, but after some talks were held, its takeovertures were rebuffed. The paper offer is claimed to value Dowty shares at 191 pence; they closed on Wednesday night at 145 pence. Dowty’s board emphatically rejected the TI offer, saying it significantly undervalued Dowty’s potential, and urged shareholders to sit tight and not sell in the market, although its only hope looks to be a white knight.
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