AMSTERDAM (Reuters) - Seven out of eight analysts believe French electrical parts distributor Rexel (RXL.PA) will sweeten its 3 billion euro ($4.34 billion) offer for Dutch rival Hagemeyer NV HAGN.AS, a Reuters poll showed.
Hagemeyer rejected again this week a 4.60 euro per share breakup offer from Rexel, which proposed to buy Hagemeyer and sell parts of it to French company Sonepar. Rexel made the offer after Sonepar had initially bid 4.25 euro per share for Hagemeyer’s 645 million shares.
Sonepar withdrew its bid, stating it would buy Hagemeyer’s Asian-Pacific unit and some parts of European operations from Rexel.
The analysts polled by Reuters said 4.96 euros per share or 3.2 billion euros would be a fairer price for Hagemeyer, according to the average of the poll. Individual estimates ranged from 4.60 euros to 5.10 euros.
Hagemeyer shares were flat at 4.69 euros by 7:15 a.m. EDT, slightly outperforming a 0.9 percent lower Amsterdam blue chip index .AEX.
Seven out of eight analysts said they did not expect a third party to appear and start a bidding war for Hagemeyer.
Orbis Investment Management, which holds about 8.2 percent of the shares of Hagemeyer said it supported management’s rejection of the Rexel bid.
“We believe that (Hagemeyer) management have acted in the best interests of all stakeholders in the past and at present in response to the two offers, so they have our continued support in their efforts to maximize shareholder value,” the fund manager said in its monthly commentary, which was posted in the Orbis Web Site www.orbisfunds.com.
Hagemeyer primarily serves the construction and installation sector and benefited throughout 2006 from soaring copper prices, which it passed on to buyers.
However copper prices have not risen at the same pace in 2007, leaving Hagemeyer more exposed to difficult construction market conditions both in Europe and the United States and with challenging comparables.
Hagemeyer shares have gained 43 percent in the past month on takeover speculation and trade at 19.6 times projected 2007 earnings, compared with Rexel (RXL.PA) at 12.1 times and U.S. rival Wesco (WCC.N) at 9.8 times.