French equipment maker acquires US-based Gehl

09 September 2008

French material handlinng equipment maker Manotou is acquiring US construction and agricultural equipment maker Gehl Company, through its wholly owned subsidiary  Teledor Corporation, in a friendly all-cash deal at $30 per share, representing a 120-per cent premium over GEHL's closing price on the last trading day prior to this announcement, and a premium of 92 per cent above the average closing price of GEHL's shares over the last six months.

The transaction, values Gehl at an aggregate enterprise value of approximately $450 million, will be effected through a tender offer for all outstanding shares of Gehl followed by a second step, cash-out merger. 

In addition to regulatory clearances, the tender offer is subject to the condition that the tendered shares, together with the 14.4 per cent of the outstanding shares currently owned by Manitou, constitute at least two-thirds of the shares of GEHL on a fully diluted basis after taking into account the cash-out of options and restricted stock plus one share.

The acquisition cost for the GEHL shares not already owned by Manitou amounts to $331 million, which the French equipment maker intends to finance from a portion of its own liquidity and a €210-million term loan facility arranged by Société Générale, which will be partially syndicated to both French and international banks.

Manitou's tender offer commencing today, will remain open until 20 October unless extended. If during the period of the offer, Gehl accepts a superior offer, it would have to pay its French suitor a termination fee of $14 million and Manitou would be obligated to tender its shares into the superior offer.

Gehl chairman and CEO, William D Gehl, whose grandfather, Michael Gehl, worked as a sales manager and helped to build the firm, said in  statement, the acquisition would help build Gehl into a "more significant player" in the global compact equipment marketplace. "The combination of Gehl and Manitou offers a substantial value to our shareholders today while affording our dealers and employees with future opportunities for continued success,'' he said.