Manufacturing News

​Metso rejects Weir takeover offer

Metso has rejected the latest takeover offer from the Weir
Group.

Earlier this month Weir proposed a merger of the two
companies, that would have seen it acquire all of the shares of Metso for approximately
€30.49 per share, a 35 per cent premium on the crushing and screening machinery
manufacturer’s share price.

However Metso rejected it out of hand, with Weir stating
that the manufacturer’s board “did not engage with Weir”.

Metso labelled the offer as ‘opportunistic’, adding that is undervalued the company.

According to Metso “the Board concluded that the revised
proposal continues to significantly undervalue Metso and the value to
shareholders of Metso continuing as an independent company pursuing its own
growth strategy”.

Metso chairman Mikael Lilius explained that “[Metso] has
considered the approaches from Weir carefully and thoroughly; we have also
carefully considered the opportunities that Metso has as an independent company
and its strong growth prospects. We believe that Metso has a real opportunity
to create significant value for all its shareholders by pursuing its own course
and that the proposal from Weir significantly undervalues this opportunity and
that a takeover by Weir at these conditions would not be in our shareholders’
best interests”.

The company went on to say the offer came as the mining
capital equipment market is experiencing a trough, and the most recent offer
ignores the room for upside in the market when the investment cycle turns.

Following this rejection, Weir stated it believed it had
made “a compelling proposal, but remains financially disciplined and therefore does not intend to pursue this opportunity further at this time”.

It is understood that a merger of the two companies would
have created a company worth around US$ 15 billion.

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