16th Apr 2014 07:47
LONDON (Alliance News) - The Weir Group PLC Wednesday said there was no guarantee it would change the terms of its takeover approach to Metso Oyj, after the Finnish company rejected the approach, saying it wouldn't be in the best interests of its shareholders.
Metso said it doesn't see any reason to begin talks with Weir about a combination, and it remains confident in its standalone prospects.
"Weir continues to believe that there is a compelling strategic rationale for bringing the two companies together in a merger structure," the Glasgow-based company said in its response. "The board of Weir believes that it has made an attractive merger proposal and there is no certainty that it will revise the terms of its proposal."
Weir has been calling the approach a merger proposal, buts its shareholders would hold the vast majority of the combination under its initial proposal.
Detailing the proposal for the first time since it became public knowledge on April 1, Weir said it had proposed an all-share deal under which Metso shareholders would receive 0.8400 Weir shares per Metso share held, resulting in Metso shareholders owning approximately 37% of the combined company.
"The proposal was structured to enable the shareholders of both Metso and Weir to share in the very significant value creation that would result from material cost synergies in addition to further revenue synergies expected to be generated through the combination," the British company said.
"In keeping with the spirit of the merger proposal, Weir had proposed that the combined company would have a significant presence in, and a long term commitment to, Finland as well as the UK and would be listed in both Finland and the UK with full index inclusion in both countries, alongside shared management and board responsibilities," it added.
Weir, which is being advised by Bank of America Merrill Lynch, said it would make further announcements if and when appropriate.
Weir shares were down 1.4% at 2,504 pence in London early Wednesday, one of the biggest declines on the FTSE 100. Metso was down 4.9% at EUR27.32 in Helsinki.
By Steve McGrath; [email protected]; @SteveMcGrath1
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