LONDON (Reuters) – Weir Group said Finnish rival Metso rejected a second takeover offer around 20 percent higher than a first approach the British engineering company made in April.
The improved bid of 30.49 euros per share valued Metso at around 4.5 billion euros (3.66 billion pounds), a 34 percent premium to Metso’s share price on May 26, the day before the bid was rejected.
Weir’s initial proposal had valued the Finnish firm at around 25.6 euros per share.
Weir said Metso shareholders would have owned around 40 percent of the combined entity and the two firms would have made at least 150 million pounds in cost savings as a joint group.
“Weir believes it made a compelling proposal but remains financially disciplined and therefore does not intend to pursue this opportunity further at this time,” the company said in a statement.
A deal would have helped Weir expand further into the heavy mining equipment sector, in which Metso is a market leader.
Weir is keen to expand its mining arm after years of strong growth in its oil and gas division, which has seen profits triple since 2009.
The company sits in a crowded mid-sized industrial sector which industry insiders say is ripe for consolidation in order to provide a wider range, and a greater scale, of equipment and services to cost-conscious clients.
Shares in Weir group were trading 0.5 percent higher at 0817 BST, while Metso shares were suspended in Helsinki pending a statement from the firm. Weir’s second proposal included a special dividend payment to all shareholders of the combined group of 2.13 euros per share
(Reporting by Sarah Young and Karolin Schaps; Editing by John Stonestreet)
Britain's Weir says Finland's Metso rejects raised takeover offer
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