MAN in hostile Scania bid
AFP · 18 Sep 2006, 15:35
Published: 18 Sep 2006 15:35 GMT+02:00
The board of Scania immediately rejected the offer which would create the biggest truck maker in Europe and third biggest in the world.
The terms, in cash and shares, represent a premium of 36.0-39.0 percent over the recent Scania share price but a key Scania shareholder, the Swedish Investor group which is controlled by the Wallenberg empire, said that the price was too low.
However, MAN chief executive Haakan Samuelsson told a meeting of analysts in Germany that he was confident of winning round shareholders.
If successful, the takeover offer by MAN would create the biggest truck maker in Europe and the third biggest in the world.
Samuelsson said: "Scania and MAN are two very profitable companies which complement each other ideally in industrial terms.
"The two groups have comparable structures and the same tradition as far as the work of the engineers is concerned."
He added that MAN would operate a "dual brand" strategy after the merger, maintaining Scania as a separate entity with its own research and development team. The two brands would pursue jointly expansion in growing markets such as China.
Scania is controlled by several large investors, among which are the Swedish Wallenberg investment group and German car maker Volkswagen.
Shares in MAN sank on the Frankfurt stock exchange, losing 3.18 percent to 62.02 euros in early afternoon trading.
Analysts said the fall was because of prospects that the German group would be forced to raise its offer. MAN needs to win 90 percent of the voting rights in Scania for the takeover to succeed.
"The fact that Scania and core shareholder Investor rejected MAN's bid is weighing on MAN shares," said a trader in Frankfurt who asked not to be identified.
Anders Bruzelius at Swedbank in Stockholm added: "People are absolutely speculating on a higher bid, another conclusion cannot be drawn."
In trading in Stockholm on Monday the price of shares in Scania showed a gain of 5.18 percent to 446.5 kronor.
MAN had said it would offer 0.151 new ordinary shares in MAN plus 38.35 euros in cash for each A and B share in Scania, valuing each Scania share at 48 euros or 442 kronor.
The terms represented a premium of 39.0 percent on the average value of Scania A shares in the three months to September 11, the last day on which Scania shares were quoted before being suspended. The terms offered a premium of 36.0 percent on Scania B shares.
Investor controls 10.8 percent of Scania, but is part of the Wallenberg investment group which controls a total 29.0 percent of the company.
Dealers said it was uncertain whether Volkswagen, the biggest shareholder in Scania, would agree to a sale.
The carmaker holds 34.32 percent of the voting rights and 18.7 percent of the share capital in Scania.
A Scania spokeswoman noted that Volkswagen chief executive Bernd Pischetsrieder, who is the chairman of Scania's supervisory board, participated in a unanimous vote to reject the MAN bid.
MAN said that it had already signed an agreement with French group Renault to buy Renault's holding of 2.85 percent in Scania. Renault owns 5.18 percent of the votes in Scania.
DaimlerChrysler is currently the biggest maker of trucks in Europe, followed by the combined businesses of Volvo and Renault, according to data compiled by the ACEA European Autombile Manufacturers Association.
MAN ranks number three, but with Scania it would leapfrog the other two to take the number one spot.
MAN said it hoped to achieve cost savings of at least 500 million euros a year with the full benefits becoming effective three years after a deal. No factory closures were planned. The headquarters of a merged group would be in Munich in southern Germany, but important management functions would remain in Sweden.
MAN, which makes lorries of more than six tonnes, employs about 80,000 people and has annual sales of 18.5 billion euros.