Story
Vesuvius Shares Surge 27% After Confirming RHI Magnesita Takeover Approach
Summary
Shares in Vesuvius plc surged after the industrial engineering firm confirmed it received a takeover proposal from rival RHI Magnesita, a deal which has received backing from its largest shareholder, Cevian Capital.
Vesuvius plc shares soared by more than 27% on Tuesday after the company confirmed it has received multiple unsolicited takeover approaches from industry rival RHI Magnesita N.V. The latest proposal values the engineering firm at a significant premium, prompting one of the stock's largest single-day gains in recent history.
Details of the Proposal
According to a statement from Vesuvius, the most recent non-binding proposal was received on August 27, 2026, valuing each Vesuvius share at 551 pence. The board stated it is currently evaluating the offer with its financial and legal advisers.
The consideration is a mix of cash and stock, structured as follows:
- 470 pence in cash per share.
- 0.28 new RHI Magnesita shares for every 10 Vesuvius shares held.
The proposal also allows Vesuvius shareholders to retain the declared 2026 interim dividend of 7.1 pence per share without any reduction to the offer price, adding a further incentive for investors.
Shareholder Support and Market Reaction
AdFollowing the announcement, Vesuvius shares jumped 27.4% to trade at 477 pence. The market reaction was amplified by news that the company's largest shareholder, Cevian Capital, has provided an irrevocable undertaking to support the proposal if it is formally recommended by the Vesuvius board. Cevian Capital holds a 23% stake in the company.
In contrast, London-listed shares of the potential acquirer, RHI Magnesita, came under pressure. This is a common pattern for an acquiring company in a cash-and-stock deal, as its investors weigh the financial outlay and potential share dilution.
Context and Next Steps
Both Vesuvius and RHI Magnesita specialize in refractory materials—heat-resistant products essential for high-temperature industrial processes like steelmaking. Investors see a clear strategic rationale for consolidation in the sector.
Under the UK Takeover Code, RHI Magnesita now faces a deadline of 5 p.m. London time on October 27, 2026, to either announce a firm intention to make an offer or declare that it will not proceed. Vesuvius has advised its shareholders to take no action at this stage, as there is no certainty a formal offer will be made.
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