Daimler and Rolls-Royce not planning to raise their joint takeover offer for Tognum

Article by Christian Andrei, on March 14, 2011

Daimler's CFO Bodo Uebber doesn’t see why Daimler AG and Rolls-Royce Group Plc would have to raise their joint takeover offer for Tognum AG. Uebber said that they are sticking to their bid of 24 euros per share. On March 8, Daimler and London-based engine maker Rolls-Royce offered to buy the company in a deal that puts the value of the heavy-duty engine manufacturer at 3.2 billion euros ($4.41 billion).

This bid is higher by 30% compared to Tognum's March 4 closing price, the last trading day before the companies revealed their interest, says Automotive News. The shares traded above the offer price since Tognum said that it had yet to enter a deal with Rolls-Royce and Daimler on a price.

Some investors expect the bid to go up. In a note, Juergen Siebrecht, an analyst with HSBC, said that 29 euros per share would be a "fair takeover value." Daimler and Rolls-Royce are able be firm with their offer since Daimler's current 28.4% holding enables them to obstruct other companies from making any effort to acquire Tognum.

That’s because German law states that shareholders with more than 25% of a company have the power to veto any major strategic moves. Uebber said that Daimler and Rolls-Royce “have time” as they own 28.4% of Tognum and aim for 50% plus 1 share.

Tognum was recently valued at 3.32 billion euros. Daimler and Rolls-Royce are offering 16.5 times earnings before interest and taxes for Tognum. Bloomberg data show that acquirers paid a median of 13.25 times Ebit for assets in the auto- and truck-parts industry in the last five years.

Topics: daimler, rolls-royce

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

More positive news has been pouring in before the year ends. For those who have been waiting to hear the latest word on Toyota 86, we have some great news....
by - December 10, 2016
Hyundai is making the green vehicle race more competitive by offering three powertrain types -- pure electric (EV), hybrid (EV plus combustion engine) and plug-in hybrid (PHEV) – in one...
by - December 9, 2016
Although specs for the new Renault Megane had already surfaced several weeks ago, we didn’t know that the company has cooked up something new. Aside from the 200hp gasoline, Renault‘s...
by - December 9, 2016
For the first time in fifty-eight years, Infiniti registers its first US-Spec Q60 Coupe in Cuba. American products have not been allowed entry into Cuba for six decades. But it...
by - December 9, 2016
Chevrolet has already given out the pricing for some of its 2018 Equinox models. Not only will the new Equinox be available in both the US and Canada, it is...
by - December 9, 2016
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries