France's Gemalto launches cash offer for Wavecom

PARIS (Reuters) - Gemalto (GTO.PA), the world's largest provider of smart, mobile SIM and bank cards, launched an unsolicited cash offer for Wavecom (WAVC.PA), valuing the French wireless technology firm at over 100 million euros ($135.9 million).

Chief Executive Olivier Piou said on Monday the bid was "not hostile" but added that while the two companies agreed on the tie-up idea, "there was no agreement on the timing".

Wavecom could not be reached immediately for comment.

Gemalto said it was offering 7 euros a share, a premium of 72 percent over Wavecom's closing price on Friday, and 20 euros per convertible bond (Oceane), in a deal that will allow it to expand in the fast-growing Machine-to-Machine (M2M) communication market.

Founded in 1993, Wavecom has a market cap of 64.45 million euros and recorded sales of 202.3 million euros in 2007.

The M2M communication market, whose applications range from smart metering and GSM/GPS satellite tracking to wireless alarms, is expected to grow by 20 percent annually in the next five years.

As Wavecom has net cash of some 45 million euros, Gemalto would spend up to 60 million euros on the deal and still have over 250 million euros in cash left, Piou told a conference call.

The offer's success is conditional on Gemalto securing 50.01 percent of Wavecom's capital at closing.

Describing the planned acquisition as "relatively small" and carrying "low integration risk", Piou said Gemalto was keeping its 2009 goal for earnings before interest and tax (EBIT) unchanged.

He added that there would be synergies from the deal but did not provide further details.

Gemalto, the product of a merger between Axalto and Gemplus, had 2007 revenue of 1.631 billion euros.

Gemalto and Wavecom shares were suspended on Monday ahead of the announcement. Gemalto closed at 25.97 euros and Wavecom at 4.08 euros on Friday. Wavecom WVCM.O is listed both in Paris and in New York.