(Editors Note; As Bodycote is a UK based company all numbers are in British currency. £1.5bn. translates to roughly $2.2 Billion USD. Note the comments from CEO Mr. Jim Fairbairn about focusing on higher margin technologies and selling or closing underperforming locations. The markets loved this offer, further down see how the share price was affected.)

"Bodycote (BOY) has confirmed that is in talks with private equity firm Apollo Global Management over a takeover offer which values the company at over £1.5bn.

The heat treatment specialist said it is discussing an 885p per share offer, plus payment of the 16.1p dividend payment that was due to be put to shareholders at next week's AGM.

Bodycote's board said it entered into talks after receiving "a number of previous proposals" from Apollo. However, it added that there was no certainty an offer would emerge, nor at what price.

Bodycote's shares surged by 17 per cent to 816p per share.

Over the past two years, chief executive Jim Fairbairn has overseen a shake-up of the Macclesfield-based business to place a greater focus on its higher margin Specialist Technologies arm, and to sell or close underperforming sites.

Last month, Jefferies analyst Andy Douglas described Bodycote as "our most preferred" UK industrial stock, forecasting an uplift in the group's adjusted operating margin from 15.7 per cent last year to just below management's 20 per cent target by 2028.

He added that the company's "improvement potential" in terms of higher sales and margins remained despite the macroeconomic backdrop deteriorating.

Apollo now has until 19 June to make a formal bid or at least make public its firm intention to make an offer."