Tognum rejects € 3.2 billion takeover

Engine manufacturer Tognum has said it won't recommend a € 3,2 billion takeover offer from Daimler and Rolls-Royce to its shareholders.

Tognum - which owns off-road diesel engine manufacturer MTU - said that while it welcomed the joint venture takeover proposal from a business perspective, it did not consider the offer price appropriate.

Daimler and Rolls-Royce launched their tender offer for Tognum on 9 March through a 50/50 joint venture company called Engine Holding. Under the deal, Tognum shareholders would receive € 24 per share - a premium of approximately +30% to the closing price prior to the offer being announced. The acceptance period for the deal expires on 18 May.

Tognum said the offer price "notably fails to reflect the capital expenditure carried out in recent years and the growth prospects for the Tognum Group".

Daimler already owns a 28,4 % stake in Tognum, and Engine Holding must build its stake to at least 50% in order to breach the ownership threshold and gain control of the company. Meanwhile, Tognum's executive and non-executive directors own about 6,9 % of the Germany-based company's shares.