Wavecom Board Rejects Gemalto Offer as `Inadequate'

Wavecom SA said Gemalto NV's hostile bid for the provider of wireless equipment for machine-to-machine communications is ``inadequate'' and not in the best interests of the company and shareholders.

``The proposed acquisition by Gemalto fails to deliver sufficient value to merit support,'' Anthony Maher, head of Wavecom's supervisory board committee for mergers and acquisitions, said in a Business Wire statement today.

On Oct. 6, Gemalto offered to buy Wavecom, based outside Paris, for 7 euros a share, or a total of about 111 million euros ($153 million). The market for wireless machine-to-machine communication in cars and home-alarm systems is forecast to grow 20 percent in the next five years, according to Gemalto Chief Executive Officer Olivier Piou.

Wavecom said it will issue a ``more detailed'' opinion on the offer and a formal response, in accordance with stock-market regulations.

Wavecom shares slipped 26 cents, or 4 percent, to close at 6.20 euros in Paris. Gemalto climbed 56 cents, or 2.6 percent, to 22.54 euros.

Gemalto doesn't plan to raise its offer, Piou said in an interview today. ``We think it's a very good offer,'' Piou said. ``The ball is in the court of the shareholders.''

Gemalto has said the bid is conditional upon it holding at least 50.01 percent of Wavecom at the end of the offer period. Gemalto filed its offer with French market regulator Autorite de Marches Financiers on Oct. 6, and the timetable will be determined by the AMF.

Gemalto is the world's largest maker of smartcards. The company would finance the purchase from existing funds, and will have more than 250 million euros in cash left if it buys all of Wavecom, according to Piou.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net.

To contact the editor responsible for this story: Lars Klemming at lklemming@bloomberg.net.

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