Tanfield gets $104 million offer for electric vehicles division

By Murray Pollok10 March 2010

Tanfield's Vigo production facility in the UK, where it makes both UpRight aerial platforms and Smit

Tanfield's Vigo production facility in the UK, where it makes both UpRight aerial platforms and Smith electric vehicles.

UpRight/Snorkel owner Tanfield Group has received a £70 million (US$104 million) offer for its Smith Electric Vehicles (SEV) division from its US partner, Smith Electric Vehicles US Inc (SEVUS). SEVUS owns the licence to manufacture SEV electric trucks in the US.

The offer comprises £37.0 million ($55 million) in cash and £33.3 million ($49 million) "contingent credit" in any SEVUS initial public offer (IPO) before September 2015. The offer price covers SEV's assets, Tanfield's 49% shareholding in SEVUS, and the existing licence agreement between SEVUS and Tanfield.

Tanfield will issue a circular to shareholders in the coming weeks to provide further details of the offer, and will also make a recommendation to its shareholders at that time.

The full details of the offer are not yet available, but AI understands that SEVUS would wish to retain the manufacturing capability at the Vigo Centre in the UK. That is where the electric version of SEV's most popular product, the Ford Transit, is produced.

Tanfield has granted SEVUS a four month period in which to clarify and negotiate the offer.

Tanfield has been investigating the possibility of a demerger of the electric vehicles and powered access businesses for some time, although the structure of any demerger was not clear.

For example, there was uncertainty over which business would remain as Tanfield's core activity, and whether current chief executive officer Darren Kell would stay with the electric vehicle or powered access business. The sale of SEV to its US partners would imply that Mr Kell will remain with Tanfield running the powered access business.

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