Takeover bid could lead to shipyard shake-up

24/03/2006 - 09:50:55
Engineering group Babcock added around £130m (€188m) to its value today as defence firms BAE Systems and VT Group considered a takeover bid which would reshape Britain's shipbuilding industry.

BAE and VT confirmed in separate statements that they were in "exploratory discussions with respect to a potential joint acquisition of Babcock", although no bid has been tabled.

Such a deal could lead to the unification of the nation's shipyards - a move likely to please the Ministry of Defence, which has been pushing for consolidation of the sector.

Investors welcomed the news as Babcock shares soared by as much as 23% to value the company at just under £700m (€1.01bn). Shares in VT were up 5% while BAE moved 1% higher.