CVC Walks Away From Bodycote, Leaving Veritas's 940p-Per-Share Bid Unchallenged

CVC Advisers said on Monday it does not intend to make an offer for Bodycote, ending its pursuit of the British thermal-processing group and leaving Veritas Capital's recommended 940-pence-a-share takeover — £1.65 billion of equity, about £1.85 billion including debt — as the only bid on the table.

A Rule 2.8 withdrawal, in CVC's own words

CVC's statement, issued through the London Stock Exchange's regulatory news service, says it does not intend to make an offer and is consequently bound by the restrictions under Rule 2.8 of the Takeover Code — the standard six-month cooling-off bar for a bidder that walks away. The restriction can be set aside if the Veritas offer lapses, a third party announces a firm offer, or the Takeover Panel agrees there has been a material change of circumstances.

Bodycote's directors said in their own announcement that they noted CVC's statement and are now focused on delivering value and certainty to shareholders through the Veritas acquisition. The tone of the exit was cordial: "CVC is grateful for the constructive engagement shown by the Bodycote board and management team, and thanks them for the time they have devoted to considering this potential transaction," the firm said.

Three bidders down to one

Bodycote has been in play since May, when Apollo Management made a conditional £1.52 billion proposal; Apollo retreated in June, and in August both CVC and Veritas tabled near-identical indicative proposals, 915 pence and 914 pence respectively.

Veritas broke the deadlock in early September, lifting its offer to 940 pence and winning the board's agreement on September 1. CVC said at the time it would evaluate its options. Monday's statement is its answer.

The arithmetic of 940 pence

The agreed price is not all cash at the headline number: 932.8 pence comes in cash from Veritas's Vulcan Alpha Bidco vehicle, and the remaining 7.2 pence is Bodycote's fiscal 2026 interim dividend, which shareholders keep without any reduction to the offer price.

The £1.65 billion equity figure puts the enterprise value at about £1.85 billion once debt is included — roughly $2.45 billion at the exchange rate carried with the Reuters report. Apollo's June approach was pitched at £1.52 billion, about £130 million below where the equity value ended up.

Why London's industrial fringe keeps selling

Bodycote, based in Macclesfield, is a specialist in heat treatment and metallurgical processing — hardening, coating and joining metals for aerospace, defence, automotive and energy customers. Reuters notes its sale fits the wider pattern of overseas private equity buyers picking off British-listed companies judged to be trading at a discount.

The board is recommending the deal unanimously, advised by Barclays, Goldman Sachs and Perella Weinberg. What happens next is procedural but not automatic: the scheme document has been published, shareholder meetings are set for October 21 at the Hilton London Paddington, and completion is expected in the first quarter of 2027, with the London listing cancelled shortly after.

The remaining questions are timetable, not contest. Shareholders still have to vote, the court must sanction the scheme, and regulatory conditions have to be satisfied. CVC's reserved right to return exists on paper, but under the Takeover Code it needs the Veritas deal to collapse, a rival bid to appear, or the Panel to find a material change of circumstances — none of which is in view. For now, Veritas has the field to itself, and the board's unanimous recommendation makes October 21 the next date that matters.