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Germany’s energy group Uniper has rejected a $9-billion takeover offer from Finnish energy firm Fortum because the offer price doesn’t reflect the German company’s true value and is not in its best interest, according to Uniper.
Fortum’s offer is for US$25.86 (22 euro) per share in cash, for a total of US$9.46 billion (8.05 billion euro).
While Fortum has argued that Uniper’s businesses are well aligned with Fortum’s core competencies, and the investment will deliver an attractive return, the German company’s management and supervisory boards recommended to shareholders not to accept the offer.
“Both Boards are of the opinion that Fortum’s offer is not in Uniper’s best interest, nor in the interest of its shareholders, employees, and further stakeholders,” Uniper said in a statement.
The takeover target also deems the price offered as inadequate and not fully reflecting the value of Uniper, and sees a fair offer price at over US$31.73 (27 euro) per share.
In addition, the German firm doesn’t think that Fortum will provide Uniper with considerable added value or strategic benefit.
Uniper is also concerned that “Fortum has not expressly ruled out extensive structural changes such as the conclusion of a domination and profit transfer agreement, a squeeze-out of Uniper minority shareholders or a delisting of the Uniper shares.”
“The offer document also does not clearly state what Fortum’s true intentions are. Now begins the time for discussions. We will find out if Fortum is prepared to follow up its public statements with binding commitments. We will hold Fortum to its word to ensure Uniper’s independence as far as possible,” Uniper CEO Klaus Schäfer said.
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Commenting on Uniper’s opinion, Fortum President and CEO Pekka Lundmark said:
“We are convinced that our offer represents attractive value to Uniper’s shareholders offering 36% premium to the price prior to intensified bid speculation, and 120% premium to the initial trading price post the spin off. As we have stated in the past, this is our best and final offer. We are pleased that Uniper has accepted our offer to enter into discussions with us. We look forward to developing a constructive dialogue with Uniper’s management team on co-operation possibilities which we believe are substantial and could benefit Uniper and Fortum stakeholders alike, and to formalize the commitments which we previously set out in our offer document.”
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.