4 Min Read
* Tognum says 24 euro per share offer is not appropriate
* Cannot recommend it to shareholders
* Daimler, Rolls-Royce say offer is 'compelling'
* Tognum shares up 0.6 percent
* Daimler shares down 0.5 percent, Rolls-Royce up 0.9 pct
(Recasts with joint Rolls-Royce, Daimler statement)
FRANKFURT, April 15 (Reuters) - Daimler (DAIGn.DE) and Rolls-Royce (RR.L) stuck to their 3.2 billion euro ($4.6 billion) offer for Tognum TGMG.DE, dismissing the German diesel engine maker's assertion that it was too low.
"The offer we have made has a compelling industrial logic and... represents the best prospect for accelerating long-term growth and is in the best interest of Tognum, its customers and employees," the two bidders said in a joint statement.
A raft of investors, including Dutch bank ING ING.AS and activist investor Guy Wyser-Pratte, have balked at the 24 euro per share price, which is below the current market level.
Tognum said earlier on Friday it would not recommend the offer to shareholders.
"The offer price notably fails to reflect the capital expenditure carried out in recent years and the growth prospects for the Tognum Group," Tognum said in a statement.
It said the offer matched the 24 euro issue price when Tognum floated in 2007 and so did not reflect any net debt reductions since then.
The offer was launched on April 6. Shareholders have until May 18 to tender their shares to German carmaker Daimler and British engine maker Rolls-Royce.
Tognum shares were 0.6 percent percent higher at 26.12 euros by 1420 GMT, indicating investors have not yet given up on a better deal.
Daimler has said it did not intend to pay more than 24 euros per share. Daimler shares were down 0.5 percent, while Rolls-Royce was up 0.9 percent.
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If the two bidders succeed with the takeover, Rolls-Royce will expand its marine and diesel power business. Daimler will re-establish closer ties with a major buyer of its truck diesel engines, which are retooled by Tognum for other purposes.
The two hope to tap into a global market worth more than 30 billion euros a year that is growing at above-average rates.
The offer is contingent on Daimler and Rolls-Royce gaining control of at least half of Tognum's equity plus one share. Daimler already holds 28.4 percent of the Friedrichshafen, Germany-based company.
Daimler once owned all of Tognum but sold it to Swedish private equity group EQT for 1.6 billion euros in equity and debt in December 2005. It then bought back more than 20 percent in April 2008, the year after its former unit went public. (Reporting by Maria Sheahan; Additional reporting by Rhys Jones and Andreas Kroener; Editing by Mike Nesbit and David Cowell) ($1=.6945 euros)