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Leica welcomes US counter-offer

Leica makes measuring instruments

(Keystone)

The United States-based firm Danaher has made a white-knight offer via a subsidiary for the Swiss surveying specialist Leica Geosystems.

The Leica board of directors has welcomed the new offer, which is higher than the hostile takeover bid made by the Swedish engineering concern, Hexagon, last month.

Leica advised its shareholders on Tuesday to accept Danaher’s offer of SFr500 ($385) per share, which values the firm at around SFr1.17 billion.

The offer, made through Danish holding company Edelweiss, comes just weeks after Leica rejected a hostile bid from rival Hexagon for SFr440, saying the offer was too low.

Edelweiss said the offer prospectus would be published at the end of the month. The offer will be open for acceptance from August 11-24.

Leica said Edelweiss would open opportunities for growth in the US market in addition to supporting expansion through acquisitions.

"Danaher will be a good partner to further strengthen Leica," said Leica’s CEO Hans Hess.

Serge Rotzer, an analyst at Zurich Cantonal Bank, said Danaher's bid had come as a surprise. He added that he did not expect Hexagon to raise its offer.

Superior value

Professional instruments firm Danaher, which reported a turnover last year of $6.9 billion and a profit of $746 million, expects to assume around $80 million of debt in connection with the acquisition. The offer is subject to regulatory approval.

Prior to the announcement of the offer, Danaher acquired 95,000 (around four per cent) of the total outstanding shares.

Danaher has also entered into an agreement with a holder of approximately six per cent of Leica’s shares, in which the holder will tender the shares into Danaher’s offer subject to specific terms and conditions.

"We believe our offer represents a superior value for the company’s shareholders and stakeholders," said Danaher CEO Lawrence Culp in a statement.

"We intend to build on [Leica’s] exceptional foundation by sharing our complementary skills and global resources."

However Culp did not rule out job cuts. "In the real world there are no guarantees," he said. "The one exception is results for customers and shareholders - and the workers understand that."

News of the recommended bid lifted Leica's shares by over 11 per cent to SFr508 - above Danaher's offer of SFr500 per share - during early trading on Tuesday.

swissinfo with agencies

Key facts

Leica Geosystems is almost 200 years old.
The company is active worldwide and has its headquarters in Heerbrugg near St Gallen.
It employs more than 2,400 people in 23 countries, with 900 in Switzerland.
It has hundreds of partners located in more than 120 countries.
Leica Geosystems recorded a net profit of SFr50.6 million on sales of SFr773 million in its last fiscal year.
The firm plans an annual growth of ten per cent.

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