PARIS, June 11 French set-top maker Technicolor
SA has rejected a revised offer from a JPMorgan Chase
investment fund to buy a 30 percent stake for 179
million euros ($223 million) and opted instead for the original,
lower offer which it said was better structured.
Technicolor, which is trying to pay down debt and enact a
turnaround plan, said it would now try to get shareholder
approval for the earlier offer of 169 million euros ($211
million) from JPMorgan's Jesper Cooperatief fund.
Technicolor said in a statement that the new offer lacked a
sufficient legal framework and imposed higher break-up fees.
"The uncertainty created by the new condition outweighed the
benefits of the Amended proposal," it said.
Technicolor has struggled for years to enact a turnaround
plan that would reduce its fixed costs and allow it to compete
against lower-cost set-top boxes produced in China and Tunisia.
After cutting 6,000 jobs last year Technicolor said it aimed
to reduce debt by 200-300 million euros and generate 400 million
in free cash flow over 2012-15.
It has been seeking a partner for its loss-making set-top
box business and a buyer for its last remaining factory making
the devices in France, which filed for insolvency earlier this
JPMorgan and Technicolor appeared ready to seal their deal
when San Francisco-based private equity investor Vector Capital
made a higher offer than JPMorgan in late May.
Vector offered to pay 1.90 euros per share for a 17.5
percent stake, then subscribe to a second issue to existing
shareholders at 1.56 euros per share, Technicolor said.
JPMorgan originally offered 1.60 euros a share for the
entire 30 percent stake.
Analysts were sceptical, however, that Technicolor
management would work with the newcomer or seek shareholder
approval for the higher offer, since it had already agreed to
work with JPMorgan.
According to media reports Technicolor has also been fending
off a demand by activist investor Daniel Loeb, owner of Third
Point, to sell its licensing business. Third Point has reduced
its stake in Technicolor in recent weeks falling below the 5
percent disclosure threshold.