Draka's In Demand
Having rejected a €15 per share from Nexans and accepted a €17.20 per share offer from Prysmian SpA , Draka says it has now received an approach from Tianjin Xinmao S&T Investment Corp., which wants to discuss a €20.50 per share offer. (See Prysmian Lands Draka for $1.15B.)
The Prysmian offer values Draka's stock at €840 million (US$1.15 billion), while the offer from Xinmao -- a Chinese conglomerate that specializes in property development and goods distribution but which also has a technology division that makes optical fibers -- is worth just more than €1 billion ($1.36 billion).
"Xinmao has approached Draka and expressed that it would like to enter into further discussions with Draka regarding such proposed offer," notes the Dutch company in a statement issued on Monday only hours after it announced the Prysmian deal. Draka says it will now assess Xinmao's approach, keeping in mind the "interest of all its stakeholders (including its shareholders) as well as its current arrangements with Prysmian S.p.A."
It should be noted that Draka is within its stated rights to consider the new approach. It had inserted a clause in the agreement with Prysmian that allows it to terminate that arrangement if a "more beneficial" offer is made.
Draka's share price leapt 27 percent Monday after news of the Xinmao counter-offer was released to close the day on the Euronext exchange at €19.60, but the stock has eased back by nearly 3 percent today to €19.02.
— Ray Le Maistre, International Managing Editor, Light Reading