Wednesday 4th February 2009

Porsche Offer for Scania 'May Succeed'

A token offer for the truckmaker may succeed after its shares drop

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Sports car manufacturer Porsche could end up as a major shareholder in Scania after the Swedish truckmaker’s shares plummeted, it has been reported. Under Swedish law Porsche was required to make a bid for Scania after it increased its stake in Volkswagen, which controls Scania.

However as Porsche stated it had no strategic interest in the lorry manufacturer it made the minimum offer possible. But Scania’s share prices have now dropped below the mandatory offer and analysts believe that shareholders would be likely to tender their shares, cementing Porsche's €2.8bn takeover offer for Scania.

'As long as the share price is below the offer price, people will tender,' Max Warburton, analyst at Sanford Bernstein, told the Financial Times. Scania yesterday reported a 50% drop in its fourth-quarter results.

‘I would not be surprised if Porsche will end up with almost all of the free float,’ Arndt Ellinghorst, analyst at Credit Suisse, added.

Meanwhile Porsche is expected to reach an agreement with banks on extending a 10 billion-Euro loan facility to help fund its purchase of stock in VW.

[willcrookz]

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