Takeover target sees Middle East growth lift

TOOL hire firm Lavendon showed its suitors why it is worth fighting for after reporting better than expected sales.

The Leicestershire-based business, which is at the centre of a bidding war between Belgian and French rivals, said its sales for the year had exceeded expectations thanks to its booming business in the Middle East.

The group’s overall sales grew by 8pc last year and its business in the UK was up 9pc.

However, operations in the Middle East, which make up just over a quarter of its revenue, grew by a whopping 16pc.

The strength of the region has attracted the attention of French-owned Loxam and Belgium’s TVH who are looking to gain a slice of the lucrative pie, and the group has been engaged in a number of back and forths since mid-November.

TVH, which initially sought to buy Lavendon for £348m, is the current leader after it upped its offer to 261p per share earlier this month – meaning the proposed bid now stands at £444m.

But Loxam, which had its last offer recommended by the Lavendon board, is rumoured to be contemplating a higher bid.

Lavendon has seen its share price soar by more than 85pc as a result of the bidding war and shareholders are poised to make millions as a result.

As the deal stands, its largest shareholder, M&G Investments, will make £84m while the firm’s chief executive Don Kenny will make £1.1m.

Kenny said: ‘As we move into 2017 the group is well placed to build on the momentum developed during the past few years and to make further progress in the year ahead.’

Shares at the company rose 0.5pc, or 1.25p, to 265.75p.