Leica Geosystems goes on the offensive
Leica Geosystems, countering a hostile takeover bid by Swedish company Hexagon, says it will buy back SFr100 million ($78 million) of its own shares.
The Swiss measuring equipment maker said in a statement on Thursday that the buy-back programme will be realised provided the company remain independent.
In addition to announcing the bait for shareholders, Leica also laid down its financial targets for 2007-2009, saying it was aiming for annual growth of ten per cent in the period.
It also aimed for a profit margin at the level of earnings before interest, depreciation and amortisation (Ebita) of 20 per cent by 2009.
Earlier this week, Hexagon made an offer of SFr440 per share for Leica, valuing the company at just over SFr1 billion.
The offer was three per cent less than the closing price of SFr454 at the stock exchange last Friday. It runs from July 11 to August 5, and is conditional on at least 50.1 per cent of shareholders’ approval.
Viking intimidation
Hans Hess, chief executive of Leica, rejected the bid, saying it was “too low, opportunistic and didn’t have any industrial logic”.
Analysts have estimated the Swiss company’s value at nearer SFr550-530 per share.
“We’re not going to be intimidated by a few Vikings,” Hess said at the launch of a roadshow at which Leica was whipping up hostile feelings towards a sale.
“We’re not going to let Leica go under for a giveaway price. Leica is stronger on its own,” he said, adding that merging with Hexagon would water down the company.
Hess also presented the company’s ambitious five-year plan to increase turnover from around SFr770 million today to SFr1.2 billion in 2009.
Operating profit should go up from SFr130 million to SFr240 million, he said.
Market support
Hess said he continued to advise Leica shareholders to take no action. The company’s board will publish its official opinion on the bid by July 15.
“Our formal response will clearly demonstrate why shareholders will be better served by Leica Geosystems’ value creation plans in both the short and medium term,” he said.
The stock exchange sided with the Swiss company. Leica’s share price had dipped by 0.9 per cent by Thursday afternoon but at SFr459 lay clearly above the offer made by Hexagon.
Shares in the Leica have leapt about 20 per cent since the Swedes announced they were planning a bid.
swissinfo with agencies
Leica Geosystems is the second-largest producer of surveying equipment worldwide.
The company, with headquarters in canton St Gallen, employs more than 2,400 people in 23 countries.
The technology firm, Hexagon, employs 6,400 people in 25 countries and has its headquarters in Stockholm.
Hexagon has an annual turnover of around SFr1.4 billion, about twice as much as Leica Geosystems.
The Swedish company reported a profit of SFr61 million last year while the Swiss group registered a profit of SFr50.6 million – nearly ten times that of the previous year.
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