Hoeganaes AB rose to a record after holding company H Intressenter made a 11.5 billion-krona ($1.79 billion) offer to buy and de-list the Swedish maker of iron and metal powders.
Hoeganaes jumped as much as 18 percent to 322.50 kronor, the highest intraday price since the company went public in April 1994, and was trading up 17 percent at 320.5 kronor as of 12:40 p.m. in Stockholm. That’s 0.2 percent higher than the bid value of 320 kronor a share.
The limited stock reaction indicates investors don’t expect a competing offer, Claes Hemberg, an economist at Avanza Bank Holding AB, said today by phone.
H Intressenter, jointly owned by closely held Lindengruppen AB and Foundation Asset Management Sweden AB, said it intends to take Hoeganaes off the stock exchange should the offer win 90 percent acceptance, according to a statement today. Lindengruppen controlled the Hoeganaes, Sweden-based metal processor until its shares began trading on the Stockholm bourse in 1994, and has remained its largest owner since.
“It’s not a question of it being better or worse to be publicly traded, it’s just how we are used to working with our holdings,” Lindengruppen Chief Executive Officer Erik Urnes said by phone. “We have a very strong track record in terms of developing industrial companies.”
The holding company has “great confidence” in Hoeganaes’s current management team and existing strategies, Urnes said in the statement.
Assets held by Lindengruppen, owned by the CEO’s wife Jenny Linden Urnes, include industrial coatings maker Beckers AB and art-materials supplier ColArt. Foundation Asset Management “shares our view on long-term ownership,” Lindengruppen said.
H Intressenter also said it has a loan agreement with SEB AB on financing of the takeover, without specifying an amount.
The offer was announced before the Hoeganaes board had the opportunity to evaluate it. The board said in a separate statement that it will release an opinion on the offer’s fairness before the acceptance period expires on April 12.
H Intressenter controls 34.4 percent of Hoeganaes’s stock and 47.9 percent of votes. Lindengruppen held 21.8 percent of the shares and 37.8 percent of the votes prior to the offer. H Intressenter has acquired Industrivarden AB’s 12.6 percent equity stake at 320 kronor a share, it said.
Foundation Asset Management will contribute with “significant experience from owning and developing industrial companies and a strong global network,” according to the statement. The fund, with headquarters in Stockholm, is owned by the three largest Wallenberg-family foundations. It also manages holdings such as in Investor AB, SEB AB and SKF AB.