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 user 2009-11-20 at 11:06:32 am Views: 43
  • #22968


    AMSTERDAM–Orbis Portfolio
    Management, a large shareholder in Oce NV Wednesday said it will oppose
    Canon Inc.’s EUR730 million bid to take over Europe’s largest printer
    maker.In a statement, Orbis said that, “as a result of a flawed
    negotiation process,” Oce’s assets are “being significantly undervalued”
    at the proposed buyout price of EUR8.60 a share.

    Orbis added
    that Oce should consider looking for other buyers for each business
    unit, “yielding a much higher value for shareholders as a result.”Orbis
    said it has an approximately 10% holding in Oce.For the deal to
    continue, at least 85% of Oce’s shares need to be tendered to
    Canon.Orbis also questioned whether Oce’s management has acted in a way
    that best serves the business units or shareholders. “Not even Konica
    Minolta Inc (4902.TO), [Oce's] long-term strategic partner, was invited
    to bid for the company.”However, Konica Minolta has no intentions to
    launch a counterbid for Oce or take any financial stake in the Dutch
    firm, a company spokesman told Dow Jones Newswires.”Konica Minolta and
    Oce currently have operational ties, but no plans to have capital ties”,
    he said.

    Responding to Orbis’ statement, Oce said it has been in
    frequent contact with “all relevant industry players” and that it has
    considered and discussed “various transaction forms, all in the best
    interest of its shareholders and other stakeholders.”Bestinver Gestion
    SA, a holder of about 9.5% of Oce’s outstanding shares, as well as
    Ducatus NV, ASR Nederland NV and ING AM Insurance Cos., holders of
    cumulative preference shares that carry about 19% of Oce’s voting
    rights, have all said they will support the offer.One of Oce’s most
    critical shareholders, Hermes Focus Asset Management Europe Ltd., which
    holds a 4.93% stake according to its most recent regulatory filing,
    hasn’t yet commented on Canon’s planned tender offer.

    Canon said it will buy Oce for EUR730 million in cash, sending Oce
    shares sharply higher, as the Japanese office machine maker aims to grow
    amid the shaky prospects for corporate spending. The Japan-based
    company currently owns around 21% in Oce.Subsequently, Konica Minolta
    shares fell due to soured sentiment as a result of Canon’s bid.By 1054
    GMT Wednesday, Oce shares were trading 0.3% higher at EUR8.61, slightly
    outperforming a 0.1% rise in the mid-cap market

    Canon bid ‘significantly undervalues’

    Canon’s €730m ($1.1bn) agreed bid for digital
    printing rival Océ was challenged on Wednesday when a large Océ
    shareholder said the offer “significantly undervalued” the Dutch
    company’s shares.Orbis Fund Management – which manages $20bn in funds
    and has a reputation for seeking out undervalued assets and then
    mounting a robust defence of its interests – said it would not tender
    its roughly 10 per cent holding to Canon at the current offer price.“As a
    result of a flawed negotiation process.?.?.?Océ’s assets are being
    significantly undervalued at the proposed buy-out price of €8.60 per
    share,” the fund said.

    Canon’s bid is conditional on acceptances
    for 85 per cent of the shares in Océ, and Dutch law offers substantial
    protection to minority holders, giving Orbis some power to try and
    negotiate a higher price.The Japanese company responded by saying that
    it believed the announced offer that was agreed upon with Océ’s
    supervisory board and management board “to be reasonable”.Orbis has
    challenged takeovers in the past. In 2003 it opposed Warren Buffett’s
    bid for mobile-home maker Clayton Homes and in 2007 it pushed Citigroup
    to raise its offer for Japanese broker Nikko Cordial.Orbis attacked the
    management of Océ on Wednesday, saying it had not invited Konica
    Minolta, a strategic partner of the Dutch company, to make an offer. Océ
    denied the charge, saying it had spoken to “all relevant industry
    players” and had considered various transactions before opting for the
    Canon deal.

    Konica Minolta has said it will not make a
    “Orbis again is questioning whether Océ’s management has
    acted in a way that best serves the business units or shareholders,” the
    fund said. It called on Océ to seek separate bids for each of its main
    business units, arguing that this would produce a higher price for
    shareholders.Canon wants to buy Océ to expand its product portfolio for
    high-end digital printers. It is offering a 70 per cent premium to the
    closing price of Océ’s shares last Friday.Océ made a net loss for
    ordinary shareholders last year, so the company’s valuation mainly
    depends on the future earning power of its assets.

    Canon’s bid is
    pitched at 1.26 times Océ’s net book value – a low multiple for the
    technology industry. But Océ’s balance sheet carries €581m in
    intangibles such as goodwill, and net tangible assets attributable to
    ordinary shareholders are only €10m.At its most recent peak in 2007,
    however, Océ earned €77m in net income for ordinary shareholders. If Océ
    could achieve that regularly under Canon’s ownership then it would
    equate to buying the Dutch business at a price-to-earnings multiple of
    9.5 times.

    Konica Minolta Says It Has No Plan to
    Counter Oce Bid

     Nov.09 — Konica Minolta
    Holdings Inc., the Japanese lens and office-equipment maker, said it has
    no plan to counter Canon Inc.’s offer to buy Oce NV for 730 million
    euros ($1.1 billion).“There’s no plan to make an offer to Oce at the
    moment,” Minoru Ikehara, a spokesman at the Tokyo-based company, said by
    phone today. While Konica Minolta had considered an acquisition of the
    Venlo, Netherlands-based company, it decided to maintain a business
    alliance instead, he said.

    Konica Minolta may make a counter bid,
    Royal Bank of Scotland Group Plc said in a report yesterday. Konica
    Minolta, which has a business partnership with Oce, suffers the same
    lack of scale as Canon, Wim Gille, an analyst for RBS, said in the
    report.“It’s not realistic that rival companies such as Konica Minolta
    compete against Canon in a bidding war,” said Hisashi Moriyama, a
    Tokyo-based analyst at JPMorgan Chase & Co. “Canon has a lot of
    money relative to rivals.”Konica Minolta fell 5.3 percent to close at
    836 yen on the Tokyo Stock Exchange, the biggest drop since Aug. 7.
    Canon, the world’s largest maker of office equipment, rose 3 percent to
    3,470 yen, while Japan’s benchmark Nikkei 225 Stock Average slid 0.6