Netherlands' Getronics Says U.S. Firm Shows Interest, Shares Spike
Struggling Dutch computer services firm Getronics said on Tuesday a U.S. company was
interested in buying it, sending Getronics shares up as much as 19.4% at close in Amsterdam.
"The board of management and the supervisory board have decided to explore this option and its strategic implications for the company," Getronics said in a statement. It did not name the interested party.
The list of U.S. companies potentially interested in Getronics could include Electronic Data Systems , Hewlett-Packard , Computer Sciences , Perot Systems
, IBM and Dell , analysts at Rabo Securities said in a client note.
Gertronics shares rose to 19.4%, and analysts said they expected a minimum takeover price of
7.50 euros per share, which would value the company at around 920 million euros ($1.25 billion).
Getronics, which warned in May it could report a 2007 net loss, has been shedding businesses since losses in Italy caused it to miss its 2005 profit target. It has sold units in Italy, Spain, Portugal and China and majority stakes in its French and Japanese operations, making it easier to digest for a buyer.
The Dutch company's main business of managing desktop computers and networks for large companies generates thin margins, and providers need size to win contracts and reach profitable economies of scale -- something Getronics has lacked outside the Benelux countries.
Analysts have said this could make Getronics a target for an IT rival looking to be a leader in the Benelux and enlarge operations in the U.K. and Germany.
SNS Securities analyst Victor Bareno said he expected a minimum takeover price of 7.50 euros per share, valuing the company at 11 times adjusted earnings before interest, tax and
amortization (EBITA), comparable to European rivals such as Atos Origin.
"Getronics is underperforming compared to these companies, but in case of an acquisition one would think a company sees synergies which will add up to European averages," Bareno said,
upgrading the shares to "buy" from "reduce."
Petercam's Luuk van Beek said that in case of a bidding war, potential bids could amount to around 9.25 euros per share.
Getronics said it will provide further information when it releases its 2007 half-year results, which are due on Aug. 29.
"Until there is either the expectation that an agreement can be reached or the Boards have decided to terminate the process or legal or regulatory requirements arise requiring us to issue
a press release, no further information will be disclosed," Getronics said.
Dutch telecoms group KPN last year held takeover talks with Getronics that yielded no deal. KPN declined comment on the Getronics' announcement.
KPN has said that some of Getronics' businesses would fit into its strategy of expanding from its core business of providing telecommunications links into more value-added services.