VW's Scania bid backed by big investor at Swedish truckmaker
STOCKHOLM (Bloomberg) -- Volkswagen Group moved closer to sealing a 6.7 billion euro ($9.3 billion) deal for the rest of truckmaker Scania after a major shareholder, Swedbank Robur, said today it would accept VW's offer for its shares.
The Swedish pension funds group is the fourth-largest owner of Scania shares measured by capital with a 1.9 percent stake. The group's decision comes a day after Alecta, the number three owner, said it was spurning the German company's offer and a day before VW's bid expires on Friday.
VW already controls 62.6 percent of Scania's capital via direct and indirect holdings along with 89.2 percent of voting rights in the Swedish company. It is bidding for the rest of Scania to push forward cooperation between the Swedish truckmaker and MAN, which VW also controls.
The German company, which said earlier this month that it won't raise its offer, only plans to pursue the bid if shareholder acceptance reaches 90 percent, the threshold needed under Swedish law to force remaining owners to sell their holdings and delist the company.
VW's offer of 200 crowns (22 euros) per share is 36 percent more than Scania's closing price on Feb. 21, the day VW announced the bid.
Rejections by several Swedish pension funds have left VW's target of 90 percent acceptance in doubt. That uncertainty is reflected in Scania's share price which has been trading far below VW’s share bid.
Scania shares rose more than 8 percent to 187.5 crowns on Thursday after Robur's announcement, but were still below the 200 crown per share offer price.
"This [decision by Swedbank Robur] increases the likelihood the bid will go through, but I would still say that it is a 50-50 chance they [VW] will need to extend the acceptance period at the end of the day, tomorrow," Handelsbanken Capital Markets analyst Hampus Engellau said.
VW's bid suffered a setback last month when Scania board members without direct links with VW said the offer was too low and did not reflect the long-term potential of the company nor the likely savings from a merger.
Swedbank Robur said on Thursday it had closely considered this assessment, but it thought the offer was "reasonable."
Owners with just less than 6 percent of Scania capital have publicly rejected the bid. If another 4 percent decide to reject it, the bid would fail.
That means VW will still have to round up an overwhelming majority of the remaining smaller shareholders to reach its acceptance target.
That could prove difficult. "If we look at how things normally are, there are always a few percent of small shareholders who don't actually know they own stock in Scania," Engellau said.
Volkswagen has the option of extending the acceptance period after tomorrow to give itself more time to win backing from the vast body of individual savers who have only small holdings.
Reuters contributed to this reportContact Automotive News