MBE (a division of McNally Bharat Engineering) has agreed to subscribe for 10 million shares at 50p, a 108 per cent premium to its previous closing price, and in addition it has teamed up with Standard Chartered to provide new borrrowing facilities of £12 million.

Specialist is also buying its MBE Cologne subsidiary, which specialises in the manufacture of machines and components for the specialist engineering industry.

As a result of the transaction, MBE will hold a 41.7 per cent stake in Specialist following the deal, but has agreed with the Takeover Panel that this will not trigger a mandatory bid.

John May, chairman of Specialist Energy Group, comments, ‘We are delighted to have reached these agreements with MBE which we believe will be transformational for the Group and in the long term interest of all our customers, staff and shareholders.

‘MBE is fully supportive of the company’s senior management team, its strategic plan for Hayward Tyler and supporting the development of the Group.’

MBE has committed to retain Specialist’s AIM listing for two years, subject to the passing of proposed resolutions at the forthcoming general meeting on 30 April.