19 Nov 06. Scania, the Swedish truck maker involved in a bitter takeover battle, will this week report MAN, the German company trying to buy it, to Swedish market regulators for alleged malpractice. It said the bid made by MAN to Scania’s shareholders in a prospectus published last week was priced at SKr464 a share, lower than the SKr475 it had said previously that it was going to offer.
Market rules state the buyer must offer shareholders at least the same price it paid to buy shares in the target company on the market. MAN said on October 12 it had bought Scania shares at SKr475. The alleged regulatory breach stems from exchange rate movements. MAN offered €51.29 a share on October 12, worth SKr475 at the time, but the weakening of the euro since then means its value has decreased to SK464 a share. Scania’s decision to report the issue to regulators underlines the increasingly bitter nature of the takeover battle, which is the target of a €10.3bn ($13.2bn) hostile bid by its German rival. The Swedish truck maker believes MAN should adjust the price in the prospectus to reflect exchange rates, as there is a perception in the market that the SKr475 offer remains unchanged. MAN is expected to argue its offer was made in euro and not kronor, although people close to Scania said this raised the question of which currency Scania shareholders would be paid in. It is understood some sellers of Scania shares since the SKr475 offer was made on October 12 have received kronor and not euro. Scania, and its second largest shareholder Investor, the holding company of the Wallenberg family, have been steadily ratcheting up the pressure on MAN in recent days. (Source: FT.com)
Babcock and VT: Interim Results. Babcock International Group and the VT Group both announced (14 Nov 06) their interim results for the half-year ended 30 Sep 06. Babcock’s revenue was £487.6m (£386.7m for the six months to 30 Sep 05) with profit before tax of £26.4m (£18.9m). The order book was worth £2,300m. VT revenue was £466.7m (£405.6m) with profit before tax of £26.2m (£24.7m). The order book was worth £3,500m.
Comment: Both Companies are likely to feature as the MoD’s Maritime Industrial Strategy matures in the coming months. In the words of Babcock’s Chief Executive: “We have a strong bid pipeline and are expecting selection of preferred bidder or financial close on a number of significant contracts over the next six months.”(Source: DNA DEFENCE NEWS ANALYSIS, Issue 0644, 20 Nov 06)
BATTLESPACE Comment: As BAE and VT withdrew their bid for Babcock, how will the company fit in with the Maritime Industrial Strategy outside the two? Babcock is salted for the lion’s share of the CVF assembly so it is likely to be a major partner in the Maritime Industrial Strategy but at its own terms, which makes Shipco rather than a BAE-led company being the end result.
16 Nov 06. Hewlett-Packard Co.’s fiscal fourth-quarter earnings quadrupled and its revenue rose 7.2% as it expanded sales and profits across its core businesses. But with the technology giant’s restructuring plan largely complete, the company forecast the same rate of growth this fiscal year. H-P, which makes a variety of products including printers, personal computers and software, has ridden a wave of profits over the past year, primarily because of a restructuring launched by Chief Executive Mark Hurd in July 2005. Under Mr. Hurd’s plan, H-P announced 15,300 layoffs — or about 10% of its work force — among other cost-cutting measures. The cuts have helped the Palo Alto, Calif., company boost profits. In a conference call yesterday, Mr. Hurd said H-P had “substantially completed its restructuring” and was working to consolidate real estate. That means the company can no longer rely on cost cutting and will have to increase its sales more quickly in order to keep up the momentum, say analysts. “Earnings growth is going to be a little more closely tied to the growth in revenue,” said Brent Bracelin, an