Oce scraps dividend amid new opposition to Canon bid

AMSTERDAM (Reuters) - Dutch printing systems maker Oce NV scrapped its 2009 dividend and warned on its prospects for 2010 on Tuesday, as new opposition to its takeover by Japan’s Canon sparked hopes for a higher bid.

The company, which makes printing and copy systems as well as scanners and offers document-management and maintenance services, posted a net loss of 23 million euros ($33.38 million) for the fourth quarter to November 2009, compared with 1 million euros profit a year earlier.

“In 2010, we anticipate that the markets will remain challenging,” Chief Executive Rokus van Iperen said in a statement, adding that at the end of the year, he saw some bottoming out in the sales of its continuous feed systems unit in the United States.

Oce, which competes with Xerox and Konica Minolta, on Monday said it still supports Canon’s offer of 8.60 euros per share or 730 million euros after 3.3 percent shareholder Hermes Focus Asset Management said it would not tender its shares.

Hermes said it was concerned the offer terms did not represent a fair sharing of value between the shareholders of Canon and those of Oce and added Oce would be worth “some four times as much as the offer price.”

Hermes joined 10 percent shareholder Orbis Portfolio Management, which in November said it opposed the deal.

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“Together with Orbis, (this) increases the chances of a change of the current proposal,” SNS Securities analyst Maarten Altena said.

Oce shares however remained below the Canon offer at 8.591 euros by 1019 GMT, little changed on the day, indicating that shareholders still expect the offer to succeed.

The Hermes move could be a new blow to the coalition Canon has created supporting its offer. Canon has already taken a 25 percent stake through purchases on the open market, Oce said.

Preference shareholders Ducatus, ASR and ING, which together hold 19 percent of Oce’s voting rights, agreed to sell their interests to Canon when the offer is declared unconditional.

Bestinver Gestion S.A. has agreed to tender its 9.5 percent stake as long as a counterbid is not at least 10 percent more than Canon’s offer.

With that factored in, Canon has more than 53 percent of shares committed to the offer, although the support is not unconditional and still not enough as Canon has said it would declare the offer unconditional if 85 percent of shares would be tendered.

Analyst have said the offer was good for Oce shareholders.

Canon seeks to counter Japanese rival Ricoh, the world’s largest copier maker, which bought U.S. office equipment distributor Ikon Office Solutions, dealing a blow to Canon which provided 60 percent of the products Ikon handled.

Canon, the world’s largest digital camera maker which derived 65 percent of 2008 sales from printers and copiers, Oce, and rivals have suffered from the economic slump forcing companies to cut office costs.

($1=.6889 Euro)

Reporting by Harro ten Wolde; Editing by Hans Peters