Kopex Surges as Owner Snubs Merger With Mining Machinery RivalMaciej Onoszko
Kopex SA’s majority owner rejected a merger offer from competitor Famur SA, Poland’s biggest mining machinery producer by market value, boosting the stock price by the most in almost five years.
Famur proposed a merger to strengthen its market position and offered to finance the acquisition of Kopex assets with own shares, it said in a regulatory statement today. Both companies are struggling to improve earnings as global demand for mining machinery is hit by weak commodities prices, according to a Bloomberg Industries report aggregating estimates of capital spending forecasts of the world’s 10 largest miners.
“I don’t intend to exchange or sell my stake in Kopex,” Krzysztof Jedrzejewski, who owns 59 percent of Kopex, said by phone today. Jedrzejewski wouldn’t comment on the reason for rejecting the merger offer.
Kopex extended gains on Jedrzejewski’s comments, advancing as much as 13 percent and closing 10 percent higher at 11.59 zloty, the highest since Dec. 9. Famur climbed 3.8 percent to 5.49 zloty, the highest close since Nov. 26, while Warsaw’s benchmark WIG30 Index dropped 0.9 percent.
TDJ SA, which owns 71 percent of Famur, amassed a 10 percent stake in Kopex, according to the statement. The companies’ combined market value is 3.51 billion zloty ($1.15 billion), according to data compiled by Bloomberg.
Famur offered Kopex shareholders its two shares for one Kopex stock, according to the statement. The company also signed a deal to buy a 10 percent stake in Kopex at 10.75 zloty per share from its majority owner TDJ by the end of June.
“Prospects for Kopex and the whole industry aren’t that great,” Maciej Bobrowski, head of research at Katowice-based brokerage Dom Maklerski BDM SA, said by phone today. “Coal production in Poland and demand for equipment will decline, so these companies should strengthen their presence abroad.”
Famur’s revenue in the first nine months of last year fell 19 percent to 933 million zloty while net income fell to 145 million zloty from 220 million zloty a year earlier.
Revenue at Kopex, which sells half of its output abroad, declined 26 percent to 1.1 billion zloty in the first three quarters of 2013, according to a presentation on the company’s website. Nine-month net income fell to 42 million zloty from 52 million zloty in the same period in 2012.
Kopex had 1.57 billion zloty of orders on Sept. 30. Its main foreign markets are Russia, Argentina, Germany and the Czech Republic, according to data compiled by Bloomberg.
Kopex slumped 40 percent last year, extending a 16 percent drop in 2012. Famur shares rose 11 percent last year, surging five-fold since the end of 2008.