Metso – a Finnish technology and automation provider for the energy sector – has rejected a takeover offer extended by the Glasgow-based Weir Group.
Earlier last month Weir approach Metso with a proposal of an all-share merger of the two companies, a move that would see the shareholders of the Finnish company hold a 37% stake in the new, enlarged group. This however was met with a firm refusal from the Metso board which decided unanimously that, in the words of its chairman Mikael Lilius, the merger “is not in the best interest of Metso shareholders”.
Mr Lilus added that “The Metso board remains extremely positive and confident in its standalone growth and value creation prospects by pursuing its current strategy. As a consequence, the board has rejected Weir’s proposal and sees no reason to commence discussions regarding a potential combination.”
In response, Weir Group made a statement that “The proposal was structured to enable the shareholders of both Metso and Weir to share in the very significant value creation that would result from material cost synergies in addition to further revenue synergies expected to be generated through the combination.”
“In keeping with the spirit of the merger proposal, Weir had proposed that the combined company would have a significant presence in, and a long-term commitment to, Finland as well as the UK and would be listed in both Finland and the UK with full index inclusion in both countries, alongside shared management and board responsibilities.”
After the Metso’s rejection of the offer there had been some speculation about Weir ‘sweetening the offer’ potentially with an additional cash payment. It has since transpired that Weir Group rather opted to ‘dig their heels in’ with the Weir chief executive Keith Cochrane saying that although he believed that there was a “compelling strategic rationale” for the deal, he warned Weir could walk away rather than return with a better offer.
He added: “The board of Weir believes that it has made an attractive merger proposal and there is no certainty that it will revise the terms of its proposal.”
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