Bodycote (LSE:BOY) shares rose 4.5% to 953.85p during Tuesday’s session after the company agreed to a cash takeover by U.S. private equity firm Veritas Capital.

Under the agreement, Veritas will acquire the Macclesfield-based heat treatment specialist for 940 pence per share in cash. Bodycote’s board has unanimously recommended the offer to shareholders.

The transaction, which will be carried out through Veritas’s Vulcan Alpha Bidco vehicle, values Bodycote’s equity at approximately £1.65 billion and the company at around £1.85 billion including debt.

Veritas raises offer from earlier indicative proposal

The formal 940p-per-share offer is above the indicative proposals disclosed in early August, when Veritas and rival bidder CVC Advisers had submitted conditional proposals of approximately 914p to 915p per share.

The takeover agreement was announced on the deadline set by the UK Takeover Panel under Rule 2.6(a) of the City Code on Takeovers and Mergers, by which Veritas and CVC Advisers were required to announce a firm intention to make an offer or state that they did not intend to proceed.

Bodycote shares traded above the agreed 940p offer price following the announcement.

Bodycote reaches 52-week high

The shares reached an intraday 52-week high of 957p, compared with the agreed acquisition price of 940p.

The move came as broader equity markets traded lower, with the S&P 500 down 0.4% and the Nasdaq declining 0.8%. The FTSE 250, of which Bodycote is a constituent, also traded against a cautious market backdrop.

The takeover announcement and the increase from Veritas’s previous indicative proposal were the principal company-specific developments accompanying Tuesday’s rise in Bodycote shares.