Canon declared its €1.32bn bid for Océ unconditional on Thursday, sealing the takeover despite only 71 per cent of the shares in its Dutch rival being tendered to its offer.
The declaration means that Océ’s remaining shareholders, who have argued that Canon’s €8.60-a-share bid is too low, have no choice but to accept the bid or else become minority investors in a business controlled by the Japanese company.
Canon made the decision after Holland’s highest commercial court ruled in its favour on Wednesday in a case brought by dissident Océ shareholders. They had accused Canon of seeking a “de facto squeeze-out” of minority shareholders by taking four of six supervisory board seats once the deal is completed.
Canon said that its offer would remain open until 19th March in case the dissidents want to accept but it could no longer raise or change its bid. Its initial bid had called for a minimum acceptance level of 85 per cent.
Buying Océ without being forced to increase its offer represents a victory for Canon, but if the minority investors do not cave in, their presence could make it harder for the world’s largest camera and photocopier company to cut costs at Océ or merge parts of it with its own business.
Orbis Fund Management – the largest shareholder in Océ before Canon’s bid, with a stake of about 10 per cent – has said it will not tender its shares at the current bid price. Hermes Focus Asset Management has also said that it is “minded not to tender and intend[s] to retain a holding in Océ at the current offer”.
Canon is offering a 70 per cent premium to the price of Océ shares before the bid. Opposing shareholders say that Océ’s share price was depressed and the offer does not reflect its break up value or synergies with Canon’s business.
Canon’s bid was pitched at 1.26 times Océ’s net book value, which is low for a technology company. Océ’s balance sheet carries €563m in intangibles such as goodwill, however, and net tangible assets attributable to ordinary shareholders are negative.
Canon wants Océ for its high-end digital printing products and technology, which is used for jobs such as printing bank statements. Canon and other office equipment makers believe they can use digital technology to expand into areas of high-volume production that are currently dominated by offset printing.