Tognum Calls Daimler Takeover Bid "Not Appropriate"

What was described as being the deal of the decade, the takeover offer made by the consortium made up of Daimler AG and Rolls Royce to German industrial concern Tognum was hit by an unforeseen response from Tognum, made public over the weekend.

Daimler and Rolls Royce planned to offer EUR24 for each tendered share in Tognum a sum that was, according to Daimler, 30 percent above the XETRA closing price of Tognum shares on Friday March 4, the date before the takeover announcement was made.

Tognum's management on the other hand says that is not enough, saying the offer is “not appropriate” and adding that they will recommend the shareholders not to take it.

“The offer price notably fails to reflect the capital expenditure carried out in recent years and the growth prospects for the Tognum group,” the company said in a statement.

On their end, Daimler and Rolls Royce reacted by saying that the “offer we have made has a compelling industrial logic and the combination of Tognum with the Daimler and Rolls-Royce joint venture represents the best prospect for accelerating long-term growth and is in the best interest of Tognum, its customers, shareholders and employees.”

Tognum's shareholders have until May 18, 2011, to take or reject the offer. Should the deal proceed (shareholders will retain their right to the dividend for the financial year 2010), Tognum will become one of the most important players in the field of manufacturing engines, propulsion systems and components for marine, energy and defense, and other industrial applications.