French group Sonepar said on Tuesday it intends to make a cash offer of 4.25 euros per share for Dutch electrical parts distributor Hagemeyer, but investors speculated on a higher bid and its shares soared.
The proposed offer values Hagemeyer at 2.5 billion euros ($3.52 billion) but Hagemeyer shares were up almost 9% at 4.53 euros by 0726 GMT, giving a market capitalisation of more than 2.7 billion euros, according to Reuters data.
"We believe that Hagemeyer will not accept the bid immediately and may try to obtain a higher price but as there is a low likelihood of a competing bid, their position is not one of strength. We therefore think that the bid has a high likelihood of being successful," analysts at SNS Securities said in a client note.
Hagemeyer confirmed it had been informed of the intended bid by Sonepar but said that until Monday evening there had been no contact with Sonepar about its offer. In August Chief Executive Rudi de Becker said the company was not for sale.
Investors have been speculating about a bid for Hagemeyer as the shares have increased over 50% since Sept. 25. Analysts had suggested that French peer Rexel was interested in the company.
Funding in Place
Dutch market regulator AFM said on Friday it had contacted Hagemeyer to ask about the share surge.
Hagemeyer is the latest in a long line of Dutch companies to be targeted for takeover. The country's firms make attractive targets as a result of liberal competition rules.
Dutch bank ABN AMRO, information provider VNU, chemical distributor Univar and Dutch industrial systems and services group Stork have been recent targets.
Hagemeyer distributes electrical materials and safety and other maintenance, repair and operations products to electrical contractors in the construction and installation business and industrial users.
Sonepar, founded in 1969 by a former airforce officer Henri Coisne, is also a provider to the electrical industry. It had 9.45 billion euros of turnover in 2006, the group said in a statement. In 1982 Sonepar acquiured Dutch peer Otra.
"Sonepar intends to combine the qualities of both Hagemeyer and Sonepar management and associates which will allow the new combination to make best use of such incremental forces and skills thus accelerating improvements, innovations and developments towards our customers and suppliers," Sonepar said.
Sonepar said it had already secured underwriting by banks for the full amount of the contemplated offer and had invited management to meet to discuss the bid, with the hope of winning their support.