Vesuvius (LSE:VSVS) shares rose as much as 23% on Tuesday after the British refractories manufacturer confirmed it was considering a takeover proposal from RHI Magnesita (LSE:RHIM) valued at 551 pence per share.
The proposal comprises 470 pence in cash and 0.28 new RHI Magnesita shares for every 10 Vesuvius shares. The valuation of the share component is based on RHI Magnesita’s one-month volume-weighted average share price on 27 August, when the proposal was made.
Vesuvius said its board is evaluating the proposal with its financial and legal advisers, including consideration of the terms and execution risks.
The company said there is no certainty that a firm offer will be made and advised shareholders to take no action at this stage.
Vesuvius Shareholders Would Own Around 13% of Enlarged Group
Under the proposed terms, Vesuvius shareholders would receive approximately 7.1 million new RHI Magnesita shares and would own around 13% of the combined company.
The proposal also allows Vesuvius shareholders to receive the company’s declared interim dividend of 7.1 pence per share without an adjustment to the offer value.
Vesuvius’ largest shareholder, Cevian Capital, provided an irrevocable undertaking on 27 August to support a recommended offer made on the proposed financial terms.
Cevian has been a Vesuvius shareholder since 2012 and has a representative on the company’s board.
RHI Magnesita Has Made Several Previous Approaches
RHI Magnesita has made a series of proposals for Vesuvius since September 2025, which were previously rejected by the Vesuvius board.
The first approach, made on 29 September 2025, valued Vesuvius at 448 pence per share in cash. Further proposals followed during October, November and December.
On 17 March 2026, RHI Magnesita proposed an all-cash offer of 550 pence per share. Vesuvius subsequently provided access to information for confirmatory due diligence.
RHI Magnesita revised the proposal on 23 June to 454 pence in cash and 96 pence in new RHI Magnesita shares, giving a headline value of 550 pence per Vesuvius share.
The share component was capped at 9.5 million new shares, representing approximately 20% of RHI Magnesita’s issued share capital at the time. Vesuvius rejected the proposal on 29 June.
The March and June proposals allowed Vesuvius shareholders to receive the 16.5 pence final dividend for 2025, which was paid on 6 July, without reducing the proposed offer value.
Those proposals also included an additional payment of 2 pence per share for each month completion extended beyond 15 months following a firm offer announcement, subject to a maximum of three months. That provision is not included in the latest proposal.
RHI Magnesita Faces 27 October Takeover Deadline
Under the UK Takeover Code, RHI Magnesita has until 5 p.m. London time on 27 October to either announce a firm intention to make an offer for Vesuvius or state that it does not intend to make an offer.
The deadline may be extended with the consent of the Takeover Panel.
Vesuvius said its announcement confirming the proposal was made without the prior agreement or approval of RHI Magnesita.
More About Vesuvius
Vesuvius is a UK-listed company supplying refractory products, systems and services used in high-temperature industrial processes.
RHI Magnesita is also listed in London and operates in the refractory products sector.
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