2023 Author: Eric Donovan | [email protected]. Last modified: 2023-08-25 09:36
The planned takeover of Tognum by Daimler and Rolls Royce threatens to fail. The large diesel engine manufacturer regards the offer price as too low.
The large diesel engine manufacturer Tognum finds the takeover offer from Daimler and Rolls-Royce too cheap. The offer price of 24 euros per share was not appropriate, announced the management board and supervisory board on Friday. Therefore, Tognum shareholders are advised not to accept the offer. Since the takeover plans of Daimler and Rolls-Royce became known at the beginning of March, the Tognum shares have been quoted above the offer price, most recently at more than 26 euros.
High growth opportunities expected
In the opinion of the management bodies, the offer price does not do justice to the investments made in recent years and the resulting growth opportunities. Tognum has invested a particularly large amount of money in reducing fuel consumption and is calculating competitive advantages in view of the increasingly stricter emissions legislation worldwide.
In addition, the company expects a further upward trend after the crisis, especially in areas of business that will only benefit from the economic upturn after a delay. Furthermore, the offer price, which is just as high as the issue price at the IPO in July 2007, does not take into account the debt reduction achieved. By the end of December 2010, the net debt had been reduced by around 300 million euros.
Independent expert opinion supports rejection
The board of directors and the supervisory board also base their negative stance on an independent report by Deutsche Bank and the financial services provider Lazard, who also come up with a higher price in their calculations. From a business point of view, however, the takeover makes sense, affirmed the Tognum management, which itself holds shares.
So far, only a few shareholders have responded to the takeover offer. Only 0.03 percent of the share capital was offered to the bidders within the first week, as the interested parties announced on Wednesday. In addition, there is the block of shares of 28.4 percent that Daimler already held. Daimler had emphasized several times that it did not want to improve the offer. "We have time," the company says. By the end of the offer period on May 18, more than half of the shares must have passed into the possession of the bidders, otherwise the offer will be void.
Joint statement by Daimler and Rolls Royce
In contrast, Daimler and Rolls Royce have rejected the assessment of the company to be taken over in a joint statement. "The joint offer for EUR 24 per share corresponds to a premium of 30 percent on the share price before the takeover plans became known," says the statement. "Daimler and Rolls-Royce are still convinced that the offer is complete and attractive and takes full account of its future prospects."
Daimler and Rolls-Royce want to develop Tognum into a global market leader for industrial engines and in future run it equally in a joint venture. Rolls-Royce is contributing its medium-speed gas and diesel engine business, which is bundled at its subsidiary Bergen. The bidders have promised that Tognum's headquarters will remain in Friedrichshafen and that production as well as research and development will continue to be located there. For jobs, Daimler boss Dieter Zetsche sees the takeover as an opportunity rather than a danger. The bidders also support the succession plan that has already been made, according to which the chairmanship of the Board of Management will be transferred from Volker Heuer to the current CFO Joachim Coers in autumn.
Until the end of 2005, Tognum belonged to the Daimler car group, then under the name MTU Friedrichshafen. At that time, the former Daimler boss Jürgen Schrempp sold the specialist in engines for cargo ships, yachts, trains and tanks to the Swedish financial investor EQT. After going public, Daimler returned to Tognum in 2008. The Swabian company is currently supplying Tognum with smaller diesel engines, which are being converted in Friedrichshafen for off-road use. At Tognum, this business accounts for around ten percent of sales.
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