Bodycote (LSE:BOY) has updated investors on the financing of its cash Acquisition by a private investment-backed bidder. Two banks have joined the interim lending group, while the Shareholder funding commitment has been reduced following a currency hedge. The offer terms remain unchanged.

Bodycote financing update: what was announced

The financing changes relate to Bodycote’s acquisition by a newly formed company indirectly owned by Investment funds. They alter the funding arrangements rather than the cash price payable to shareholders.

The shareholder funding commitment letter signed on 1 September 2026 was amended in the latest update. The commitment fell from USD 1,511,097,145.51 to USD 1,293,976,000.00 following a transaction-contingent foreign-exchange hedge covering the acquisition consideration.

Two additional banks became mandated lead arrangers and interim lenders alongside the existing lending group. The facilities documents were amended at the same time, but the update did not state the Facility amounts.

Background to the cash offer

The firm offer was announced under Rule 2.7 of the Takeover Code on 1 September 2026. Bodycote shareholders are to receive 932.8 pence in cash per share and keep the 7.2 pence FY26 interim dividend, a total offer value of 940 pence. The Rule 2.7 announcement put the fully diluted share-capital value of the cash consideration at about GBP 1,640m and the Enterprise value at about GBP 1,840m. The cash consideration represented a 36.5% premium to the three-month volume-weighted average price to 21 May 2026.

The directors have expressed support for the offer, citing the quality of Bodycote’s Business and management. The bidder is backed by a US private investment manager.

Where the scheme stands

The deal is being implemented by a court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006. The scheme document was published on 28 September 2026, and the latest update says all resolutions at the court meeting and general meeting on 21 October 2026 were passed "by the requisite majorities". The Rule 2.7 announcement said the scheme was expected to become effective in the first quarter of 2027.

Risks and outstanding conditions

Completion still depends on court sanction and on the competition and regulatory approvals set out in the Rule 2.7 announcement. The latest update did not give a revised timetable. The Rule 2.7 announcement also allows Bidco to reduce the cash consideration if Bodycote declares any further dividend or distribution before completion, other than ones Bidco is entitled to keep.

What investors may watch next

The next milestones are regulatory clearances, the court sanction hearing and confirmation of the timetable for the final day of trading. The financing amendments do not remove the need for those approvals.

Outlook

The financing changes widen the bank group behind Bidco and reflect a currency hedge, while the cash terms remain as announced. For UK shares under offer, the remaining steps are regulatory approval and court sanction.