28th May 2014 06:54
LONDON (Alliance News) - Engineering firm Weir Group PLC Wednesday said it no longer intends to pursue a takeover of Metso Oyj, after the Finnish company rejected and improved offer.
The FTSE 100-listed engineering company said it had made a new all-share offer under which Metso shareholders would have received 0.95 Weir share per Metso share, a 13% increase to the 0.84 exchange ratio that Weir Group initially proposed.
"The board of Metso did not engage with Weir and on May 27, 2014 rejected the proposal, based on its belief that the market does not fully value the prospects of Metso and that the proposal significantly undervalues Metso," Weir said in a statement.
Weir said if the deal had been accepted, Metso shareholders would have owned around 40% of the combined group and would have benefited from 40% of the value of synergies arising from the combination as well as 40% of the combined group's future growth.
The deal represented a total value to Metso shareholders of around EUR35.98 per share, a premium of 58% to Metso's closing share price of EUR22.75 on Monday, the day prior to the submission of Weir's initial proposal to Metso.
The Scottish firm had also proposed a special dividend payable to all shareholders in the combined group post-closing equivalent to EUR2.13 per share in cash to Metso shareholders. The company planned to list the combined group in both London and Helsinki.
Glasgow-headquartered Weir said it believes it made a "compelling proposal" but remains financially disciplined and therefore "does not intend to pursue this opportunity further at this time".
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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