Scania and Investor, its second-largest shareholder, said on Thursday that an increased €10.3bn hostile offer from MAN, a rival truckmaker, substantially underestimated potential earnings and synergies.
The change in stance from a flat rejection to querying the valuation led analysts to believe that the two were willing to do a deal at a higher price.
Their more conciliatory response followed a 7 per cent rise in MAN’s offer, which now enjoys the implicit backing of Scania’s largest shareholder – Volkswagen, the German carmaker – according to people familiar with the negotiations. Any attempt to negotiate a friendly deal, as VW initially urged, is unlikely to succeed as Scania branded MAN’s purchase of 14.2 per cent in the Swedish group in a dusk raid on Wednesday as “aggressive”.
One person involved in the talks hinted that a further twist could come on Friday as VW, which is also the largest shareholder in MAN with 15 per cent, could increase its stake in the German group. No one at either company or any of their advisers was available for comment.
VW is due to hold an extraordinary supervisory board meeting on Sunday to discuss its position on MAN’s offer. People close to the board said a likely first step would be for it to support MAN’s hostile attempt before seeking to take control of the combined entity in a second step. But they warned that VW’s board – with its diverse make-up from worker representatives to politicians and directors from Porsche, its leading shareholder – meant it could change tack at any moment.
Investor, which holds 19 per cent of Scania’s voting rights compared with VW’s 34 per cent, is refusing to rule out a counterbid from the Swedish group for MAN.
Such a scenario was examined at a board meeting last Sunday. But its success is unlikely without the support of VW.
Scania sought to paint a rosy picture of its future on Thursday and brought forward the release of its better-than-expected third-quarter results as part of its defence. Both Investor and Scania indicated synergies from any tie-up with MAN could double the €500m forecast by the German group to reach €1bn.
Scania said: “The board of Scania indicated to MAN [on Wednesday] that it was open for discussions between the two management teams provided MAN withdrew its offer. The board regrets that MAN has decided to maintain the hostile nature of its offer.”
Scania’s shares jumped 11 per cent to SKr476 in Stockholm on Thursday while MAN’s closed up 3 per cent at €69.8.