HELSINKI Finnish engineering company Metso MEO1V.HE has rejected Weir's (WEIR.L) approach regarding a potential combination of the two rivals, saying on Wednesday that it saw no reason to start talks with the British company.
Metso's shares surged earlier this month after it confirmed Weir's approach. They fell 3.8 percent to 27.68 euros in early Helsinki trade on Wednesday.
A source has told Reuters that Weir, which is looking to expand its mining business, proposed an all-share deal in which Metso owners would receive 40 percent of the new company. It offered a 5-10 percent premium over Metso's earlier share price, which could make the tie-up worth 3.9 billion euros ($5.4 billion).
"The board of directors... has come to the unanimous conclusion that this proposal is not in the best interest of shareholders," Metso said on Wednesday.
Finnish state, which owns 11 percent of Metso, initially said it wasn't too excited about the proposition.
Metso spun off its paper machine business Valmet (VALMT.HE) at the start of the year, basically halving the size of the company.
"The Metso Board remains extremely positive and confident in Metso's standalone growth and value creation prospects by pursuing its current strategy," it said.
($1 = 0.7234 euros)
(Reporting by Jussi Rosendahl; Editing by Erica Billingham)