 BOC Group plc CEO Tony Issac |
British gas group BOC Group plc is recommending its shareholders accept Linde's new offer to acquire BOC's entire share capital for GBP16 (USD27.77) a share.
The offer is an improvement on Linde's January offer of GBP15 (USD26.03) a share and is 39 per cent higher than the closing price of GBP11.51 (USD19.98) a share on January 23, the last working day before BOC announced Linde's approach (
Forkliftaction.com News #244).
To fund the acquisition, Linde has entered into a credit facility with Commerzbank AG, Deutsche Bank AG, Dresdner Bank AG, Morgan Stanley International Ltd and the Royal Bank of Scotland.
Linde says it is considering "various strategic options for its materials handling business segment" but is silent on a possible sale of the segment that posted sales of EUR3.628 billion (USD4.322 billion) last financial year (
Forkliftaction.com News #246).
Linde's gas and engineering segment's total sales for fiscal 2005 were EUR6,061 billion (USD7.221 billion), accounting for 62 per cent of Linde's total sales. Linde's forklift business accounted for 38 per cent.
The credit facility will be refinanced through "the combination of a capital increase, hybrid capital, the issue of bonds, bank loans and the divestment of selected activities", Linde said.
Subject to meeting all approvals, the transaction will create one of the world's largest industrial gas and engineering companies with combined gas and engineering sales of about EUR11.9 billion (USD14.18 billion). Linde will benefit from BOC's strength in the Asia-Pacific region while consolidating its position in Europe and South America.
Linde CEO Wolfgang Reitzle said he looked forward to welcoming the BOC management and employees into Linde.
"Linde and BOC are a perfect match. We will combine the best competencies and abilities of both organisations in a single integrated group and we will offer our customers a significantly enlarged product range and comprehensive services worldwide," Reitzle said.
Linde has confirmed existing employment and pension rights of all BOC employees will be fully safeguarded. It said BOC managers and employees would benefit from "greater opportunities" in the Linde Group.
BOC CEO Tony Issac said:
"[The] offer represents an excellent opportunity for BOC shareholders to realise significant value in cash from their investment. The combination of BOC and Linde will create an even more powerful international gases group, with significant operations in all five continents."
Linde says it is confident of meeting European and US competition authority clearance pre-conditions and gaining approval from BOC shareholders and the English courts. The pre-conditions are expected to be satisfied by May 2006 and the transaction finalised in the third quarter of 2006.