MAN shares leap on report of Scania bid

MAN shares leap on report of Scania bid
Shares in heavy lorry maker MAN leapt in early trading in Frankfurt on Thursday after a press report said Scania of Sweden was set to launch a bid for the German group.

Shares in Volkswagen, which owns nearly 30 percent of MAN, also benefited from the report.

MAN shares shot up by 5.54 percent to €125.81, leading the DAX index which had gained 0.25 percent overall.

Volkswagen shares surged by 3.40 percent to €180.00, giving it the second spot among blue chip gainers.

“In recent days there has been a lot of smoke about a possible takeover, now we have some fire,” said a Frankfurt-based trader in response to a report in the Swedish daily Dagens Industri.

The newspaper said Volkswagen and entities controlled by the family of Swedish investor Peter Wallenberg had agreed that Scania would bid for MAN, citing “many” unnamed sources.

The trader said Dagens Industri was usually well-informed on movements at Scania.

The newspaper report said VW supervisory board chairman Ferdinand Piech played a crucial role in hammering out a deal.

VW has long been trying to merge its heavy truck activities with those of Scania and MAN to create a new European leader in the sector.

A deal was said to depend on an anticipated October 23rd European Court of Justice ruling that would significantly reduce power held by the German state of Lower Saxony has over VW.

The state owns 20 percent of the group, but the ruling is expected to scrap the state’s right to name many VW board members and do away with a rule that no single shareholder can vote for more than 20 percent of the shares.