Scania repeats MAN refusal

The board of Swedish truckmaker Scania has repeated its refusal of a takeover bid from German rival MAN.

Scania argues that the bid is too low and that the strategic benefits of MAN’s merger plan are too small.

In a press release on Friday, the Swedish company’s board indicated that shareholders would receive a share dividend of 50 kronor per share, or a total of 10 billion kronor, including regular dividends.

The board said it would consider the exact size and timing of the dividend when the situation surrounding the MAN bid had been cleared up.

Meanwhile, a strengthening Swedish krona has eaten away at the value of MAN’s bid for Swedish shareholders. Scania and the Wallenberg family’s holding company Investor have both rejected the bid.

Investor is the second largest single shareholder in the company after Volkswagen. VW has said it will agree to the bid if the Wallenbergs can be persuaded to consent. MAN is currently the third largest shareholder in the company, with 14.5 percent of the votes on Scania’s board. Together with Volkswagen it controls 48.5 percent of the votes.

In order to force through a takeover against the Scania board’s will, MAN will need two thirds of both the A-shares and the B-shares, which cannot be done while Investor and the Wallenberg foundations, which own one third of the company’s shares, are united in opposition.

MAN’s bid is worth 51.29 kronor per share. When the bid was presented it was worth 475 kronor, but the strengthening of the Swedish currency means that it is now worth only 464 kronor per share.

In repeating its rejection of MAN’s bid on Friday, the Scania board said it was “substantially undervalued” the company, and emphasised that the Swedish company has “excellent growth and earnings potential as a standalone business.”

“MAN’s announced synergies underestimate the long term synergy potential of a carefully managed and executed combination of Scania and MAN. However, short term these synergies may be widely overstated,” the statement read.

“The Board unanimously recommends Scania shareholders not to accept the Offer as it substantially undervalues Scania.”