SWEDEN: MAN acquires Scania shares – ‘aggressively’

By just-auto.com editorial team | 12 October 2006

MAN acquired a further 5% stake in Scania on Wednesday evening, bringing its total stake to 10%, according to the Swedish financial daily newspaper, Dagens Industri.

Scania has said that it views the acquisition of shares as 'aggressive', highlighting that the move comes at a time when friendly merger talks have been proposed.

In a statement Scania said; "The board of Scania reiterates its rejection of MAN's unsolicited offer. Furthermore, the board of directors emphasises, having consulted with its financial advisers, that the offer substantially undervalues Scania in two principal respects: The earnings outlook for the standalone company is significantly above current market consensus; MAN's announced synergies materially underestimate the true synergy potential of a combination of Scania and MAN. Because of conflict of interest the representatives of Volkswagen on Scania's Board have and will abstain from participating in any decisions regarding MAN."

Volkswagen is now the largest shareholder in MAN and Scania, and has said that it wants to find a way for a friendly merger between the two companies to take place within the next four weeks.

MAN's move came just as Scania said that it will announce better than expected operating results for the third quarter. Operating income for the third quarter will exceed market expectations by close to 25%, due to higher deliveries and improved capacity utilisation, said the company, in a statment.

Further third quarter results will be announced on Monday 16 October, 2006.

Scania's second largest shareholder, Investor, has said that it believes the synergies between MAN and Scania are significantly greater than those valued in the original MAN offer to takeover Scania, according to dpa-AFX news. That offer estimated there would be cost savings of around EUR500m a year.

Dpa-AFX said that MAN paid SEK475 per share, which means that under Swedish law its original takeover offer must now be raised to this level. The original offer valued Scania shares at SEK442 each or EUR9.6bn for the company. Therefore the offer is now raised to EUR10.3bn.