Keysight sparks £1.1bn bidding war for London-listed Spirent

An American company is gatecrashing a £1bn agreed takeover of Spirent Communications, the cybersecurity specialist, in the latest example of a bidding war breaking out for a London-listed company.

Sky News has learnt that Keysight Technologies, which is publicly traded in New York, is preparing to launch a formal offer for Spirent worth roughly 200p-a-share.

That would value the FTSE 250 target at about £1.15bn.

Keysight’s bid will trump a 175p-a-share bid unveiled last month by Viavi Solutions, a US-based technology company.

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Viavi’s proposal was backed by a $400m financial commitment from Silver Lake Partners, the private equity group whose investments include the parent company of Manchester City Football Club.

One institutional investor said they expected the higher offer to persuade Spirent’s board to switch its recommendation from Viavi to Keysight.

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Spirent, whose roots date back to 1936, tests 5G and WiFi networks for clients predominantly in the telecoms sector.

Headquartered in Crawley, it employs about 1,500 people.

It became known as Spirent, having previously been called Bowthorpe, in 2000.

The emerging bidding war between two American companies for a London-listed technology provider will again raise questions about whether the UK equity markets are mispricing successful businesses with substantial growth prospects.

The UK’s sluggish economy and a weaker pound have combined to make British companies particularly attractive to US-based predators.

The Viavi offer was pitched at a premium of more than 60% to Spirent’s share price of 108.4p on the day before its announcement.

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That would mean Keysight’s bid would be worth roughly 90% more than the target’s prevailing share price – a steep premium in the context of London stock market takeovers in recent decades.

Some institutional shareholders in Spirent had indicated that while they would vote in favour of the Viavi offer, they believed it was opportunistic and left the door ajar for a rival bidder.

It was unclear on Wednesday whether Viavi would be prepared to return with an increased offer in the wake of Keysight’s approach.

So far this year, companies including Wincanton, the logistics specialist, have agreed takeovers by overseas suitors, while this week New York-listed International Paper confirmed a Sky News report that it was preparing to offer more than £5bn to buy the FTSE 100 paper and packaging company DS Smith.

Other London-listed companies which have attracted interest include Currys and Direct Line Group, although their prospective bidders subsequently walked away.

Bankers at Centerview Partners and Evercore are understood to be advising Keysight, while Spirent is being advised by Rothschild, UBS and Jefferies.

Viavi is being advised by Qatalyst Partners and Wells Fargo.

Spirent was contacted for comment on Wednesday evening, while Keysight could not be reached for comment.

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