28th Jul 2016 15:15
LONDON (Alliance News) - Premier Farnell PLC's board on Thursday said it has withdrawn its recommendation for a takeover offer from Datwyler Holding AG, after Datwyler's offer was trumped by a higher bid from US business-to-business technology firm Avnet Inc.
Avnet has made an offer for Premier Farnell at 185 pence per share, valuing the electronics distributor at around GBP691 million, a 12% premium to Datwyler's offer of 165p made in June.
Shares in Premier Farnell were up 18% at 194.50 pence late Thursday, placing them at a 5.1% premium to the new offer.
Swiss manufacturer Datwyler said it was considering its options regarding its bid for Premier Farnell.
Premier Farnell said it had considered various aspects of Avnet's offer, including valuation, transaction timing, and execution risk, and said it considered the Avnet offer as "superior" compared to Datwyler's.
As such, it proposed to cancel the court meeting that had been scheduled Friday, as well as a general meeting of shareholders, both regarding the Datwyler takeover deal. The Datwyler takeover offer had been approved by German regulators on Tuesday.
In a statement, Avnet said it believes the combination of the companies represents a "strong strategic fit and is highly attractive", citing the similar values between the companies, their product ranges, distribution channels and geographic footprint.
"The board of Premier Farnell is pleased to recommend Avnet's cash offer for the group which is at a 12.1% premium to the Datwyler proposal and provides our shareholders with significant value in cash for their shares. The combination of Premier Farnell and Avnet would create a leading high-service global electronic components distributor and represents a strong strategic fit. Both companies are highly complementary in terms of product range, distribution channels and geographic footprint," said Premier Farnell Chairman Valerie Gooding in a statement.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
Copyright 2016 Alliance News Limited. All Rights Reserved.