Scania rejects MAN''s hostile bid

25 Nov 2006

1

Mumbai: Swedish truck maker Scania has formally rejected a hostile takeover bid by German rival MAN, saying it raised the prospect of extra shareholder payouts and job losses in Sweden.

Scania, which had rejected the bid when it was proposed in October, formally rejected the 10.3 billion euro ($13.4 billion) offer after MAN released its formal offer document and prospectus last week.

"The board confirms that it continues to unanimously recommend Scania shareholders not to accept the offer," it said in a statement. "The board of Scania is of the firm view that the offer from MAN substantially undervalues Scania," it added.

In Scania's view MAN's offer grossly undervalues the company and the money it brings is unlikely to bring growth to it. Investor AB, the Wallenberg family's holding company and a major Scania shareholder with 20.1 per cent voting rights, has also rejected MAN's offer.

In October, Scania said it would be able to make a payout to shareholders of 35 crowns a share this year. It now sees scope for an additional payment in 2007. Scania is of the opinion that the company would be in the position to distribute an additional amount of up to SEK 10 billion ($1.4 billion), including ordinary dividend, equivalent to SEK 50 per share.

MAN, however, said despite Scania's fresh rebuttal it was continuing talks with the Swedish firm. Investor and Scania have said they are in contact with MAN but have offered no details.

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