LONDON (ShareCast) - (Sharecast News) - Engineering company Ricardo said on Wednesday that it has agreed to be bought by Canadian professional services firm WSP Global in a £281m deal.
Under the terms of the acquisition, WSP will pay 430p per share in cash. This is a premium of 28% to the closing share price on Tuesday and the deal is expected to close in the fourth quarter.

Mark Clare, chair of Ricardo, said: "Ricardo has made significant progress with its strategy to transform the business into a world leading environmental and energy transition consultancy, with its prospects underpinned by global mega trends supportive of long-term growth.

"However, while good progress has been made, there are further steps required to complete the transformation which bring some execution risks against the background of short-term market challenges and the uncertain geopolitical and macroeconomic backdrop.

"Against this background, WSP has made a compelling offer which represents a highly attractive premium to recent average trading levels and provides certain value in cash today for Ricardo shareholders."

Ricardo also said that WSP UK has agreed to buy just over 12.4m shares from Science Group at 430p each, representing a stake of just under 20%.

At 1000 BST, the shares were up 25% at 419p.

Russ Mould, investment director at AJ Bell, said: "Former UK-listed support services group WSP has returned to its old hunting ground and moved on environmental consultancy Ricardo.

"Canadian rival Genivar bought WSP in 2012 as a way of getting a strong foothold in the UK market and subsequently adopted its name. It has continued to grow in size and Ricardo looks to be an ideal fit for the group.

"What's interesting is how another UK firm had been building a stake in Ricardo but has pulled off a blinding deal to sell those shares to WSP.

"Science Group built up a 21.8% stake between February and May and has now flipped those shares for a £53.5 million profit. Not bad for a business that's only worth £234 million.

"Science Group had rattled the cage and got in a public spat with Ricardo, accusing it of poor operating performance and ineffective governance. Its profitable campaign now puts Science Group on the radar as an activist investor to watch closely."

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