Tata Motors has clarified regarding speculations of increasing its offer price for the proposed acquisition of Italian commercial vehicle maker Iveco Group.
The company is maintaining that its revised bid of €14.40 or ₹1,531 per share is its “best and final” offer, reported Money Control.
The revised offer, announced on October 9, increased Tata Motors’ original bid of €14.10 per share by €0.30, or approximately ₹31.91 per share as per current exchange rate.
The acquisition would expand Tata Motors’ presence in Europe and other global markets while broadening its commercial vehicle portfolio.
Tata Motors said the tender offer had received acceptances for 35% of the shares so far.
Tata Motors has clarified regarding speculations of increasing its offer price for the proposed acquisition of Italian commercial vehicle maker Iveco Group. The company is maintaining that its revised bid of €14.40 or ₹1,531 per share is its “best and final” offer, reported Money Control.
What is the offer Speaking to the media after the announcement of Tata Motors’ September quarter results on October 23, MD and chief executive officer Girish Wagh said the company was confident that the offer would receive the required shareholder participation.
“We have put forward our best and final offer of €14.4 per share and have been encouraged by the positive and constructive engagement with key stakeholders,” Wagh said, adding, as per the publication, “The best and final offer is absolutely the best and final offer and it will remain at €14.4 per share."
The revised offer, announced on October 9, increased Tata Motors’ original bid of €14.10 per share by €0.30, or approximately ₹31.91 per share as per current exchange rate.
Also Read | Iveco investors weigh €63 million gain against Tata offer
All about the deal Wagh said that the increase was intended as a goodwill gesture following a delay of around four months in the transaction process. The revised proposal values the acquisition at a maximum of about €3.91 billion or ₹41,591 crore, according to the company. The tender offer is slated to close on October 26
The deal excludes Iveco’s defence business and is aimed at combining Tata Motors’ commercial vehicle operations with Iveco’s truck and bus businesses across international markets.
The acquisition would expand Tata Motors’ presence in Europe and other global markets while broadening its commercial vehicle portfolio.
Why investor is opposing the offer? Petrus Advisers, which holds a 3.8% stake in Iveco, has urged shareholders not to tender their shares at the current valuation, reported Money Control. Reportedly, Petrus Advisers argued that the offer does not adequately reflect the company’s worth. In an alleged presentation of September 29, the investor claimed that Tata Motors’ original €14.10-per-share offer valued Iveco at around two times its estimated 2028 earnings before interest and tax (EBIT) when compared with an average of about seven times for peers including Volvo, Daimler Truck, Traton and Paccar. Petrus also maintained that Iveco shareholders should receive a greater share of the expected synergies from the combination and compensation for delays in completing the transaction.
Iveco shareholders approved all resolutions proposed by the company’s board at an extraordinary general meeting (EGM) on October 16. Tata Motors said the tender offer had received acceptances for 35% of the shares so far. It is expected that voluntary tendering will exceed 80% by the deadline of October 26.
“As is seen typically in tender offer processes, a significant portion of shares tend to be tendered towards the very end of the acceptance period, particularly in the final 24-48 hours,” he said.
Wagh said the company did not expect participation to fall below that level.
