Minority shareholders of Swedish truck maker Scania reject VW $9.21 bn bid

Two of Swedish truck maker Scania AB's minority shareholders have rejected the $22 per share offer tabled last week by its majority shareholder Volkswagen AG (VW) for beeing "too low".

VW, which holds 62.6 per cent of Scania and 89 per cent voting rights, had offered to take full control of the company after tabling a €6.7 billion ($9.21 billion) bid. (See: VW to buy out minority shareholders of Swedish truck maker Scania for $9.21 bn)

But two of Scania's minority shareholders, pension fund AP4  and Insurance firm Skandia. While AP4 has rejected the offer as too low, insurance company Skandia wants the company to remain independent.

''Scania's prerequisites to maintain its leading position are better as a listed company than as a subsidiary in a larger group. Skandia does not intend to accept the offer," Caroline af Ugglas, head of equities at Skandia told Bloomberg.

''This must be evaluated in light of the duty we have for our pensioners and it is not obvious that that is the stock market price plus a few per cent,'' Mats Andersson, head of AP4, told the paper.

VW, which also hold controlling stake in another truck maker MAN SE, had offered to pay SEK 200 ($22) per Scania A and B share, a premium of 57 per cent to Scania A share and 53.3 per cent to Scania B share on the average prices of Scania's shares in the past 90 days.

Although the offer has received a positive response from the Swedish Shareholders' Association, the IF Metall trade union at Scania in Stockholm, have expressed apprehension as they feel that they would lose their influence if VW takes full control of Scania.

VW had said that it will go ahead with its buyout only if it is able secure 90 per cent of Scania, a threshold required under Swedish law.

Scania's board today said that it will form a committee independent of the VW members to evaluate the bid and make a recommendation whether to accept the offer.

VW, which had started investing in Scania in 2000, said that until it takes full control of the Swedish commercial vehicles maker, ''it is not possible to leverage the full potential of closer cooperation at an operational level between VW and Scania, as well as between MAN and Scania, due to the legal restrictions in place to protect the minority shareholders in Scania.

VW said that a complete merger will generate additional synergies of at least €650 million per year from joint development and other steps, but added that in light of the long product lifecycles in the commercial vehicles industry, it will be 10 to 15 years before this potential synergy can be fully achieved.

''The plan to fully integrate Scania into the Volkswagen Group follows a compelling industrial logic. It will significantly improve the capabilities, efficiency and flexibility of the commercial vehicles group comprising Scania, MAN and Volkswagen Commercial Vehicles, for example by implementing a common toolkit strategy similar to the one used in our passenger cars", said Dr. Leif Östling, member of the board of management of VW.

Scania is one of the world's leading manufacturers of trucks and buses for the heavy transport industry, and of industrial and marine engines.

Employing around 41,000 people in around 100 countries, Scania generated a net income of SEK 6.2 billion in 2013 on revenues of SEK 86.8 billion.