UK outsourcer Mitie to buy peer Marlowe for $496 million

(Reuters) -British outsourcer Mitie Group will acquire smaller peer Marlowe for about 366 million pounds ($496 million) in a cash-and-stock deal, the companies said on Thursday, sending the latter's shares up nearly 8%.

Marlowe shareholders will get 1.1 new Mitie shares for each share they hold and 290 pence in cash, implying a value of 466 pence per Marlowe share.

Mitie's shares tumbled 10% to 145 pence, as of 0725 GMT. The stock was the second biggest loser on the FTSE mid-cap index , while Marlowe climbed 8% to 438.5 pence.

The deal represents a premium of 26.5% to Marlowe's closing price on June 3, a day before talks between the companies were first disclosed, according to Mitie.

Marlowe, which has a market capitalisation of about 318 million pounds, provides compliance and risk management services, including safety inspections, to UK businesses.

Mitie provides services such as fire and security as well as water and air hygiene to public and private sector clients.

The company also reported a 11% jump in profit to 234 million pounds for the year ended March 31 and suspended a 125 million pound share buyback programme.

($1 = 0.7381 pounds)

(Reporting by Yadarisa Shabong and DhanushVignesh Babu in Bengaluru; Editing by Sonia Cheema)