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Uncertainty lingers on Xinmao's Dutch bid
By Richard Fu and Zhu Mengjue |
November 25, 2010, Thursday
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UNCERTAINTY prevails over whether a little-known Chinese firm's intention to buy Dutch cable maker Draka Holding NV could succeed although its offer thwarts a bid by an Italian company.
Tianjin Xinmao S&T Investment Corp proposed to offer 20.50 euros (US$27.36) per share in cash, which values Draka at 1 billion euros, on Monday, hours after Milan-based Prysmian SpA, the world's second-largest cable maker, agreed to pay 17.20 euros a share in a cash-and-stock offer.
The deal needs approval from Chinese regulators, and it's uncertain whether it will go through, Xinmao's Shenzhen-listed unit said yesterday.
Xinmao told Draka that the combination will make the Dutch firm a global leader in optical wire and cable with access to the Chinese market.
It added that the deal will enable Xinmao to use Draka's core technologies in fiber optics products to develop the Chinese market.
Draka, whose board had recommended Prysmian's offer before Xinmao's bid, said yesterday that it would open talks with the Chinese firm and allow it to conduct due diligence.
Prysmian has said it won't raise its bid.
"In such discussions, the boards will explore the rationale, merits and risks for all Draka's stakeholders of a possible combination of Draka with Xinmao," said the Dutch firm, which rejected a 15-euro cash offer by France's Nexans SA.
Analysts have said China's proposed plan to expand its broadband to integrate TV, Internet and telephone networks could benefit fiber optic cable makers as the cost of copper cables has appreciated sharply.
Tianjin Xinmao S&T Investment Corp proposed to offer 20.50 euros (US$27.36) per share in cash, which values Draka at 1 billion euros, on Monday, hours after Milan-based Prysmian SpA, the world's second-largest cable maker, agreed to pay 17.20 euros a share in a cash-and-stock offer.
The deal needs approval from Chinese regulators, and it's uncertain whether it will go through, Xinmao's Shenzhen-listed unit said yesterday.
Xinmao told Draka that the combination will make the Dutch firm a global leader in optical wire and cable with access to the Chinese market.
It added that the deal will enable Xinmao to use Draka's core technologies in fiber optics products to develop the Chinese market.
Draka, whose board had recommended Prysmian's offer before Xinmao's bid, said yesterday that it would open talks with the Chinese firm and allow it to conduct due diligence.
Prysmian has said it won't raise its bid.
"In such discussions, the boards will explore the rationale, merits and risks for all Draka's stakeholders of a possible combination of Draka with Xinmao," said the Dutch firm, which rejected a 15-euro cash offer by France's Nexans SA.
Analysts have said China's proposed plan to expand its broadband to integrate TV, Internet and telephone networks could benefit fiber optic cable makers as the cost of copper cables has appreciated sharply.
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