(Reuters) - Finnish engineering firm Valmet VALMT.HE declined to say on Thursday whether it had further raised its stake in Neles NELES.HE as it reiterated its opposition to Alfa Laval's ALFA.ST takeover bid for the valve maker.
Valmet raised its stake in Neles to 15.5% from 14.9% after Sweden’s Alfa Laval announced on July 13 a 1.73 billion euro ($2.01 billion) bid for Neles.
Valmet, Neles’s biggest shareholder, said at the time that the offer was not in the interest of Neles, raising expectations of higher offers with Valmet seen by analysts as a possible counter bidder.
Asked during an analysts’ call on Thursday whether Valmet had further raised its stake in Neles beyond 15.5% which was flagged on July 15, Valmet CEO Pasi Laine said: “We flagged. And the next flagging limit is at 20%. So there between, we cannot give any comments to any direction.”
By acquiring Neles, Alfa Laval is seeking to boost its presence in the industrial flow control market.
Neles’ board has recommended the takeover offer but under Finnish law shareholders with more than a 10% stake can block a full takeover.
“Valmet’s goal is to have an active long-term role in the development of Neles,” Laine said in Valmet’s second-quarter earnings report published on Thursday.
“We want to participate in developing Neles in the long term, and that’s why, as a Neles shareholder, Valmet does not consider the Alfa Laval offer to be beneficial for Neles,” Laine said.
Valmet raised its stake to 15.5% by buying shares on the market when the price was above the 11.50 euros per share offer.
“We buy shares when we see that it’s beneficial for Valmet,” Laine said during the analysts’ call. “That’s how we have analysed the situation.”
Neles, whose valves are used in industries ranging from oil and gas to pulp and paper, became an independent company just three weeks ago when its parent Metso’s 2019 deal to merge its bigger minerals technology unit with Outotec was finalised.
Reporting by Tarmo Virki in Tallinn; editing by Jason Neely and Susan Fenton
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