Activist Investor Could Force Canon To Sweeten Its $2.8B. Bid

  • mse-big-new-banner-03-17-2016-416616a-tonernews-web-banner-mse-114
  • Video and Film
  • 7035-overstock-banner-902x177
  • big-banner-ad_2-sean
  • 4toner4
  • cartridgewebsite-com-big-banner-02-09-07-2016
  • mse-big-banner-new-03-17-2016-416716a-tonernews-web-banner-mse-212
  • 2toner1-2
  • 05 02 2016 429716a-cig-clearchoice-banner-902x177
  • Print

Activist Investor Could Force Canon To Sweeten Its $2.8B. Bid

 news 2015-04-01 at 12:24:19 pm Views: 220
  • #42268

     Activist Investor Could Force Canon To Sweeten Its $2.8B. Bid
    Elliott's 7.5% Axis Stake A New Twist In Canon's $2.8B Bid

    By Benjamin Horney.

    Law360, New York (March 27, 2015, ) — Activist hedge fund Elliott Management Corp. revealed its 7.5 percent stake in Axis AB on Friday, a disclosure that could cause complications for Canon Inc.'s roughly $2.8 billion takeover attempt of the Swiss video surveillance specialist.
    Elliott's partial ownership of Axis was divulged via a regulatory filing with Sweden's Financial Supervisory Authority. The disclosure could affect Canon's efforts to take over Axis, whose shares rose Friday afternoon to more than 343 kronor ($40.04) apiece, about 3 kronor more per share than when Canon lodged its takeover bid for Axis in February — meaning the pressure may be on for Canon to up its bid.
    Canon's takeover offer, worth about $2.8 billion, also stipulates that at least 90 percent of Axis shareholders must approve the deal. With Elliott disclosing a significant stake in the Swiss company, Canon may now have to convince the hedge fund to get on board with the takeover.

    Representatives for Axis and Elliott declined to comment, and a representative for Canon did not immediately respond to a request for comment.

    Canon's February takeover coincides with the Japanese company's attempts to expand beyond a sluggish camera market. The bid saw Canon offering to acquire all the outstanding shares in Axis at 340 kronor each, which at the time represented a premium of nearly 50 percent over Axis' closing stock price. The all-cash offer immediately garnered support from Axis' board and its top three shareholders, who together hold 39.5 percent of the company's stock.

    A pickup of Axis would be in line with Canon's ongoing strategic plan to keep profits up and boost overall performance to match the world's top companies. Canon has said that its initiative leans heavily on global diversification of its business lines, including through high-potential acquisitions like Axis'.

    Canon's offer is set to expire on April 1.

    Canon already dabbles in surveillance cameras and has pinpointed the segment as one poised for steep growth. The company has not disclosed how much its existing operations are worth, although they likely fall well short of its flagship camera division — but that only means there's room for growth, Canon said in February.

    For its part, Elliott has been one of the most prolific players in shareholder activism over the last year. In December, the hedge fund tied off a lengthy pursuit of Riverbed Technology Inc. with a $3.6 billion takeover that made good on its promise to find a multibillion-dollar buyer for the software company.

    The second half of 2014 also saw the fund pressing tech giant EMC Corp. to split apart its operations and consider selling off assets as a gateway to new value. And Elliott threw itself into a heated buyout fight for Family Dollar Stores Inc., saying the discount retailer's agreement to sell itself to a rival shortchanged shareholders and effectively killed a potentially lucrative bidding war.

    Axis is represented by Gernandt & Danielsson Advokatbyra KB, with Morgan Stanley & Co. serving as financial adviser. Deloitte AB issued a fairness opinion.