Mitie Group PLC

London stocks closed higher on Tuesday after new Chancellor John Healey reiterated his commitment to fiscal discipline and defence shares climbed. The FTSE 100 index ended up 61.15 points, or 0.6%, at 10,585.91, while the FTSE 250 gained 0.9% and the AIM all-share rose 1.1%. Healey, addressing Treasury staff for the first time, said fiscal control would be his first duty and the bedrock of economic stability, while Prime Minister Andy Burnham told his cabinet he will lead a cost-of-living government after announcing an £850 million tax cut on electricity bills. Defence stocks advanced, with Babcock International up 7.6% and BAE Systems up 1.8%, as Healey’s previous role as defence secretary fuelled expectations of higher military spending. On the M&A front, Mitie shares surged 39% after agreeing to a £3.1 billion takeover by OCS Group, and Segro fell 3.4% after rejecting another Prologis offer. Brent oil rose to 91.36 dollars a barrel amid heightened Middle East tensions, while gold climbed to 4,077.93 dollars an ounce.

Mitie Group reported a 10% rise in first-quarter fiscal 2027 revenue to £1.4 billion, significantly outpacing the broader market's roughly 3% growth, while its board recommended a £3.1 billion cash takeover by OCS. Contract wins and renewals surged more than 30% to £1.6 billion, and the bidding pipeline hit a record £32.5 billion. The company is expanding higher-margin services in facilities transformation and compliance, supported by its £350 million acquisition of Marlowe, which is already enabling cross-selling of fire, security, and water services. Under the OCS offer, shareholders would receive £2.216 per share including the proposed final dividend, representing a 46.8% premium to the previous day's closing price. All AGM resolutions were passed on proxy votes.

OCS has announced a recommended acquisition of Mitie, a move that would create a UK-headquartered international facilities management group with broader sector expertise and geographic reach. The proposed combination brings together two businesses with complementary strengths, a shared British heritage, and an entrepreneurial spirit. The combined group would strengthen support for customers in government, defence, healthcare, national infrastructure, life sciences, and commercial markets by broadening its portfolio of self-delivered specialist facilities services. OCS Group Chief Executive Officer Rob Legge called the milestone an exciting opportunity to build a British facilities management group better positioned to support the organisations that keep the country running, while Mitie Chief Executive Officer Phil Bentley said the recommended offer reflects the strength of Mitie's brand, capabilities, and reputation and delivers value for shareholders. The acquisition remains subject to the terms and conditions set out in the Rule 2.7 announcement.