By Kiyoshi Takenaka and Harro ten Wolde
TOKYO/AMSTERDAM, Nov 18 (Reuters) - Orbis Portfolio Management said it would not tender its 10 percent stake in copier maker Oce to Canon Inc, saying its 730 million euro ($1.1 billion) bid underpriced the Dutch company.
Orbis' statement, which echoed remarks from Dutch shareholders group VEB, saying not all shareholders would 'jump for joy', revived speculation of a richer counterbid.
The Japanese camera and office equipment maker on Monday offered 8.6 euros for each Oce share, a 70 percent premium to the previous trading day's close, in a move supported by Oce management to strengthen its product line-up and sales channels.
'As a result of a flawed negotiation process ... Oce's assets are being significantly undervalued at the proposed buyout price,' Orbis Portfolio Management (Europe), a manager and adviser to Orbis Funds, said in a statement distributed by its public relations agent FD.
In response, Oce shares passed Canon's 8.60 euros-per-share offer and traded as high as 8.879 euros on Wednesday.
Orbis said Oce management has admitted that it had not invited Konica Minolta, which has a cross-selling agreement with Oce, to bid for all or part of the company.
'Orbis Funds would not wish to tender their approximate 10 percent holding at the current offer price,' the statement said.
But Oce, which makes photocopiers and printers, rejected the claim that they had not talked to Konica Minolta or that negotiations were otherwise flawed.
'Oce has been in frequent contact with all relevant industry players, and has considered and discussed various transaction forms, all in the best interest of its shareholders and other stakeholders,' the company said in a statement.
BIDDING WAR?
For its part, Konica Minolta said it was not interested in entering a bidding war.
'We have no intention at the moment of offering a counterbid,' a spokesman said, adding that the company planned to sit down with Oce and talk about the partnership.
The Orbis' move could threaten the coalition Canon has created supporting its offer, analysts noted. Canon has already taken a 21.3 percent stake through purchases on the open market. With that factored in, Canon has 49.8 percent of shares committed to the offer, although the support is not unconditional.
'Given that Canon has an 85 percent minimal required acceptance of the shares, not more than 5 to 7.5 percent of the shareholders except for Orbis can oppose Canon's bid in order to impact the current offer,' SNS Securities analyst Maarten Altena said.
Preference shareholders Ducatus, ASR and ING, which together hold 19 percent of Oce's voting rights, agreed to sell their interests to Canon when the offer is declared unconditional. Bestinver Gestion S.A. has agreed to tender its 9.5 percent stake as long as a counterbid is not at least 10 percent more than Canon's offer.
Most analysts said on Monday that Canon's bid price was good for Oce shareholders, though some did not rule out a rival offer, possibly from Hewlett-Packard, Kyocera, Xerox, Toshiba Corp or Konica Minolta.
As Konica Minolta said it was not interested in entering a bidding war and Xerox has just done a major acquisition in the US, that could leave Ricoh and Hewlett-Packard as potential counter bidders, analysts said.
'HP is in good financial shape and can easily bid a higher price without breaching its covenants,' SNS Securities' Altena said, adding that Oce's Wide Format Printing Systems (WFPS) division would perfectly suit HP's current leading position.
Canon's offer for Oce comes a little over a year after Japanese rival Ricoh, the world's largest copier maker, bought U.S. office equipment distributor Ikon Office Solutions, dealing a blow to Canon, which provided 60 percent of the products Ikon handled.
($1=.6720 Euro)
((------------------------------------------------------------- > FACTBOX-Five facts about Oce --------------------------------------------------------------))
(Editing by David Cowell and Jon Loades-Carter)
((kiyoshi.takenaka@thomsonreuters.com; +81 3 6441 1810; Reuters Messaging: kiyoshi.takenaka.reuters.com@reuters.net)) Keywords: OCE/ORBIS (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
TOKYO/AMSTERDAM, Nov 18 (Reuters) - Orbis Portfolio Management said it would not tender its 10 percent stake in copier maker Oce to Canon Inc, saying its 730 million euro ($1.1 billion) bid underpriced the Dutch company.
Orbis' statement, which echoed remarks from Dutch shareholders group VEB, saying not all shareholders would 'jump for joy', revived speculation of a richer counterbid.
The Japanese camera and office equipment maker on Monday offered 8.6 euros for each Oce share, a 70 percent premium to the previous trading day's close, in a move supported by Oce management to strengthen its product line-up and sales channels.
'As a result of a flawed negotiation process ... Oce's assets are being significantly undervalued at the proposed buyout price,' Orbis Portfolio Management (Europe), a manager and adviser to Orbis Funds, said in a statement distributed by its public relations agent FD.
In response, Oce shares passed Canon's 8.60 euros-per-share offer and traded as high as 8.879 euros on Wednesday.
Orbis said Oce management has admitted that it had not invited Konica Minolta, which has a cross-selling agreement with Oce, to bid for all or part of the company.
'Orbis Funds would not wish to tender their approximate 10 percent holding at the current offer price,' the statement said.
But Oce, which makes photocopiers and printers, rejected the claim that they had not talked to Konica Minolta or that negotiations were otherwise flawed.
'Oce has been in frequent contact with all relevant industry players, and has considered and discussed various transaction forms, all in the best interest of its shareholders and other stakeholders,' the company said in a statement.
BIDDING WAR?
For its part, Konica Minolta said it was not interested in entering a bidding war.
'We have no intention at the moment of offering a counterbid,' a spokesman said, adding that the company planned to sit down with Oce and talk about the partnership.
The Orbis' move could threaten the coalition Canon has created supporting its offer, analysts noted. Canon has already taken a 21.3 percent stake through purchases on the open market. With that factored in, Canon has 49.8 percent of shares committed to the offer, although the support is not unconditional.
'Given that Canon has an 85 percent minimal required acceptance of the shares, not more than 5 to 7.5 percent of the shareholders except for Orbis can oppose Canon's bid in order to impact the current offer,' SNS Securities analyst Maarten Altena said.
Preference shareholders Ducatus, ASR and ING, which together hold 19 percent of Oce's voting rights, agreed to sell their interests to Canon when the offer is declared unconditional. Bestinver Gestion S.A. has agreed to tender its 9.5 percent stake as long as a counterbid is not at least 10 percent more than Canon's offer.
Most analysts said on Monday that Canon's bid price was good for Oce shareholders, though some did not rule out a rival offer, possibly from Hewlett-Packard, Kyocera, Xerox, Toshiba Corp or Konica Minolta.
As Konica Minolta said it was not interested in entering a bidding war and Xerox has just done a major acquisition in the US, that could leave Ricoh and Hewlett-Packard as potential counter bidders, analysts said.
'HP is in good financial shape and can easily bid a higher price without breaching its covenants,' SNS Securities' Altena said, adding that Oce's Wide Format Printing Systems (WFPS) division would perfectly suit HP's current leading position.
Canon's offer for Oce comes a little over a year after Japanese rival Ricoh, the world's largest copier maker, bought U.S. office equipment distributor Ikon Office Solutions, dealing a blow to Canon, which provided 60 percent of the products Ikon handled.
($1=.6720 Euro)
((------------------------------------------------------------- > FACTBOX-Five facts about Oce --------------------------------------------------------------))
(Editing by David Cowell and Jon Loades-Carter)
((kiyoshi.takenaka@thomsonreuters.com; +81 3 6441 1810; Reuters Messaging: kiyoshi.takenaka.reuters.com@reuters.net)) Keywords: OCE/ORBIS (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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