Precision instruments maker Spectris has agreed to a £3.8 billion takeover by US private equity firm Advent International, but faces the prospect of a bidding war as rival KKR considers a competing offer.

The FTSE 250-listed company will receive £37.63 per share in cash under Advent's proposal, which includes a proposed interim dividend of 28 pence per share. The deal values Spectris at approximately £4.4 billion including debt, making it the largest acquisition in Britain this year.

Spectris shares jumped almost 15 per cent to £37.68 in early trading on Monday, reaching their highest level in over a year and becoming the biggest percentage gainer on the FTSE 250 index.

The London-headquartered company, which employs about 7,400 people across more than 30 countries, provides hardware and software solutions to the pharmaceuticals, steel and automotive sectors. Spectris specialises in high-tech instruments for firms in pharmaceutical and semiconductor industries.

However, the deal faces potential disruption from KKR, which announced it remains in advanced stages of due diligence and is securing financing commitments for a rival bid. The private equity giant said it has been "engaging constructively" with the Spectris board since first making an approach on 2 June.

"KKR strongly encourages shareholders to take no action with regards to the Advent offer," the firm stated, though it cautioned there was no certainty it would make a firm proposal.

Spectris chairman Mark Williamson said the board unanimously recommends Advent's offer to shareholders. "The board remains confident in Spectris' strategy and the opportunities that will be delivered over the medium term, but believes that Advent's offer recognises the attractiveness of Spectris and represents strong and immediate cash value for shareholders at an attractive premium," he said.

Advent's offer represents an 84.6 per cent premium to Spectris' closing price on 6 June, the day before any acquisition interest was disclosed. The company had previously rejected a second takeover bid from KKR last week in favour of Advent's proposal.

Shonnel Malani, managing partner at Advent International, described the acquisition as "Advent's vote of confidence in British engineering and innovation". He added: "As active partners, we are dedicated to accelerating Spectris' growth and enhancing its leadership in precision measurement."

The takeover marks another departure from the London Stock Exchange, which has been weakened by a series of acquisitions, shifts in listing venues and sluggish IPO activity. Britain has attracted overseas buyers in recent years due to relatively cheap valuations.

The deal with Advent is expected to complete by the first quarter of 2026.

---