Rexel officially launches $4.45 bln Hagemeyer bid
AMSTERDAM (Reuters) - Rexel (RXL.PA), the world's biggest electrical parts distributor, officially launched its 3.1 billion euro ($4.45 billion) bid for Dutch rival Hagemeyer HAGN.AS on Friday, assisted by privately owned Sonepar.
Rexel, whose bid is worth 4.85 euros per Hagemeyer share including dividends, will sell its German activities to Sonepar, the world's second-largest distributor, and buy Sonepar's Swedish business to overcome any anti-trust issues, said a Rexel spokeswoman. It will make a request for approval from the European Commission by January 15.
Sonepar will also buy Hagemeyer's North American, Asian and certain European operations if the takeover is successful and Rexel's net proceeds from the deal with Sonepar are 1.7 billion euros, Rexel said in a statement.
Separately, Sonepar will also sell its 10.5 percent stake in Hagemeyer to Rexel.
Rabo Securities analyst Philip Scholte said in a client note that the Sonepar side deal could remove some antitrust concerns and significantly speed up completion.
Hagemeyer shares were up 0.4 percent at 4.68 euros at 9:14 a.m. EST, still short of the offer price of 4.85 euros.
SNS Securities analyst Martijn den Drijver said investors might still expect a longer EU review of the deal, lowering the discounted value of the bid, but he did not believe a so-called phase 2 review was needed.
Rexel said last month the deal would boost European sales to 57 percent of its total from 49 percent, and cut North American sales to 37 from 49 percent. Electrical parts distributors have seen slowing sales in the U.S., hurt by an uncertain economic outlook and declining housing spending.
Hagemeyer competes in the U.S. with Wesco International Inc (WCC.N), W.W. Grainger Inc (GWW.N), Home Depot's supply unit (HD.N), and in Europe with Britain's Premier Farnell (PFL.L) and Electrocomponents (ECM.L), among others.
Rexel repeated it expected annual synergies by 2011 between 1.3 and 1.5 percent of 2007 sales of the operations bought.
Rexel said the deal would add 3.2 billion euros to its pro forma sales of 10.7 billion euros in 2006.
Sonepar will get 3 billion euros of sales, including 1.2 billion in Europe, Rexel said, after 9.5 billion last year.
Rexel also made an offer to Hagemeyer bond holders, and Hagemeyer has said this deal was worth about 400 million euros.
Hagemeyer bond holders will receive 2,020.83 euros for their 3.5 percent subordinated convertible bonds with a nominal value of 1,000 euros if the settlement date is on or before March 30 or 1.947.79 euros if the settlement is after March 30, 2008.
Rexel confirmed that Sonepar will buy Hagemeyer's operations in North America, Australia, Switzerland, Austria, Sweden, China and Southeast Asia and six German branches but excluding Hagemeyer's international Agencies and Consumer Services unit. Continued...
