Investors in Océ, the Dutch printer manufacturer, accuse Canon of seeking a “de facto squeeze-out” of minority shareholders in its proposed acquisition of the group.
Canon’s €8.60 a share indicative offer for Océ last November gave Océ an enterprise value of €1.32bn. The acceptance period for the offer runs until March 1 but a group of investors last month said they would not tender their shares because they felt the offer was too low. Hermes Focus Asset Management, the most vocal of the funds to question the valuation, said it feared that various provisions in the deal, including the planned appointment by Canon of four of the six Océ supervisory board members, would “drastically reduce” the rights of minority shareholders in favor of Canon.
“This gives the impression that [Canon and Océ] aim to leave little choice for investors but to tender their shares, representing a de facto squeeze-out of minorities,” it said.
Canon has indicated it would not raise its offer. Although investors controlling as much as 15 per cent of shares may not tender their stock, Canon can still declare the offer binding if it falls short of an 85 per cent acceptance threshold. Hermes, which holds three per cent of Océ and invested in 2006 when Océ’s share price was significantly higher, said it wanted to have a reasonable alternative to accepting the offer “rather than being confronted with the prospect of unfair governance”. It has said it would support the takeover under better terms.
While Canon and Océ have pointed out that the bid represents a 70 per cent premium to the group’s pre-offer share price, but it is far less generous under other valuation methods such as profit or sales multiples. This is partly explained by Canon’s plan to manage Océ as a separate business unit and not seek aggressive synergies. Rokus van Iperen, Océ’s chief executive, who will stay on after the takeover, said the Dutch group held talks with others in the industry and explored takeovers, alliances and other options before deciding to support Canon’s bid as “the best solution for all parties”.
“It’s not a deal driven by cost synergies,” he said, noting that Océ’s leadership in very high-volume and wide-format printing complemented Canon’s leadership in office printing. “The whole rationale of the deal is to create together the number one player in the industry.”