TI Fluid Systems ‘minded to recommend’ takeover offer from rival

The board of TI Fluid Systems is set to recommend that shareholders accept a fifth takeover offer for the business from a Canadian rival.
ABC Technologies, which is backed by Apollo Global Management, has made a cash offer of 200p-per-share for the business, which the board has said it is “minded to recommend” to shareholders, prompting the London-listed company’s shares to rise by 19.45 per cent or 29½p to close at 181¾p.
TI Fluid Systems’ board said it was “confident” in the company’s strategy as a standalone entity, but that it was looking to back the proposal from ABC Technologies, which represents a 51.9 per cent premium to the company’s share price before the deal was announced.
TI Fluid Systems is an auto parts supplier which makes fluid-carrying systems and fuel tanks for cars and lorries. Bain Capital, the private equity firm, floated TI Fluid Systems at 255p per share in 2017.
Analysts at Deutsche Numis pointed out that Stellantis, TI Fluid Systems’ largest customer in the US, was warning of financial weaknesses, and that Forvia, a French supplier of car parts, recently said that car production in Europe may decline in 2025.
They added: “Against this backdrop and the rising challenges to achieving the 2026 revenue target, a route to realising shareholder value ought to be seen as compelling.”
Analysts at Investec said: “We think it is now very likely TI Fluid Systems and ABC Technologies will agree a formal proposal in the coming weeks and that the acquisition will be concluded in due course. We cannot rule out interest from a third party, although there has been no speculation about alternative interest.
“We still think there is an element of opportunism in this transaction, given how depressed auto supplier valuations are. This transaction highlights that there is both a consolidation opportunity and under-appreciated value in this sub-sector.”
The M&A market has continued to improve in the third quarter as companies took advantage of a more stable economic environment. Peel Hunt, the investment bank, reported that the market saw 11 meaningful bids in the third quarter of the year, bringing the year-to-date total to 40, with a combined value of £47 billion. Bidders are so far offering an average premium of 40 per cent as they seek to secure listed assets.