UPDATE 1-LS Cable buys Superior Essex for $900 million
SEOUL, June 11
SEOUL, June 11 (Reuters) - LS Cable Ltd (006260.KS) signed an agreement to buy Nasdaq-listed wire and cable maker Superior Essex Inc SPSX.O for $900 million or $45 per share in cash, the two companies said on Wednesday.
Once the acquisition is completed, the combined entity will be the third-largest wire and cable manufacturing company in the world.
LS Cable, spun off from LG Group in 2003, has been seeking revenue growth overseas due to a saturated home market. The acquisition of Superior Essex will help it boost its U.S. market presence and beef up its product offerings. LS Cable specialises in power and communication cables.
Expectations of the deal boosted shares in LS Cable, which is worth about $3.3 billion, 3.45 percent to 105,000 won before the announcement. The wider Seoul market .KS11 rose 0.41 percent.
LS Cable is paying a 50 percent premium over the year-to-date average closing price of Superior Essex common stock, the two companies said in a statement.
U.S.-based Superior Essex is the largest wire and cable manufacturer in North America. Its core products include magnetic wire, used in transformers for industrial motors and generators.
"This transaction will make LS Cable a strong global competitor at the forefront of the ongoing wire and cable industry consolidation," said John Koo, chairman of LS Cable, in an statement.
LS Cable said it expects to start a cash tender offer from July 1.
On Tuesday, sources told Reuters Basis Point that LS Cable is seeking about $750 million in financing for the Superior Essex bid.
The financing is expected to comprise a $400 million three-year term loan tranche A and a $350 million tranche B that could also have a three-year maturity.
LS Cable posted a 13.3 billion won net loss in the first quarter of 2008, swinging from a 47.9 billion won profit a year earlier. ($1=1027.0 Won) (Reporting by Park Jung-youn; Editing by Rhee So-eui and Jonathan Hopfner)