TietoEnator's key shareholders oppose Nordic Capital's takeover bid news
16 May 2008

Finnish shareholders with a total holding of more than 10 per cent in TietoEnator have rejected a 1.08 billion euro ($1.67 billion) takeover offer from Sweden's Nordic Capital.

TietoEnator's board of directors has also rejected the offer saying the price offered does not reflect the true value of the company and advised shareholders not to accept the offer.

Private equity firm Nordic Capital made an offer of 15 euros a share for all the shares in TietoEnator at the beginning of April, and extended it to May 23, but said its offer is conditional on 90 per cent of shareholders accepting it.

Nordic Capital would also need to own more than 90 per cent of shares to force out minority shareholders.

The offer values TietoEnator shares at 11.2 times expected 2009 earnings, well below 20 times LogicaCMG offered for its smaller rival Nordic WM-data in 2006.

TietoEnator stock has lost half of its value over the past two years as competitors, including IBM, LogicaCMG and Indian firms have increased market share in the Nordics.

''The offer coincides with a period that includes a low point in TietoEnator's historical share price and the lowest point since November 2006 for the Finnish equity market as a whole,'' the board noted.

''The board believes that the IT services industry, both in the Nordic region and globally, will see continuing developments in terms of organic growth as well as restructuring and consolidation. Alongside with focusing on the implementation of the revised strategy, the board continues to consider, and is in active dialogue on, other alternatives to enhance shareholder value. The board will keep the market informed if a firm and actionable alternative for shareholders materialises that could bring more value for shareholders than our revised strategy,'' the company said in a statement.

The company said the board has received a written opinion from Deutsche Bank AG, that the price of the offer in its view was inadequate, from a financial point of view, to the holders of ordinary shares and the holders of stock options in the company as a whole.

TietoEnator, whose customers include Nokia and Ericsson, has long been seen as a takeover target, and there could be other offers.

Reports also said a three-way consortium of Blackstone, Telenor and EDB Business Partner were in talks with TietoEnator about a white-knight bid with a plan to buy TietoEnator and merge it with EDB.

TietoEnator reported good performance in the first quarter of the current year with a six per cent increase in net sales at Euro 468.3 million and an 15 per cent increase in operating profit, before capital gains and one-off items, at Euro 37.6 million compared to the first quarter in 2007.


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TietoEnator's key shareholders oppose Nordic Capital's takeover bid