White knight rides to rescue of Saia-Burgess
Johnson Electric of Hong Kong has made a friendly bid for Swiss electronic components maker Saia-Burgess, valuing the company at $548 million (SFr696 million).
Saia-Burgess, which is fending off a rival SFr583 million bid from Japan’s Sumida Corporation, has advised shareholders to accept the Johnson Electric offer.
“The strategic, industrial logic and culture alignment between Johnson Electric and our company is a compelling combination that will accelerate growth and assist in executing the Saia-Burgess strategic plan,” commented Saia’s chief executive Daniel Hirschi on Friday.
The new bidder said it would offer SFr1,060 per Saia share through its wholly-owned subsidiary Gatebrook. Sumida is offering SFr950.
Trading in Saia shares was suspended at the Zurich stock exchange on Friday until 1pm and when it resumed, the price shot up by 8.9 per cent over Thursday’s close to SFr1,073.
Business partner
Saia, which is based in Murten in western Switzerland, said in a statement that Johnson Electric was a long-standing business partner.
It described the bid as offering shareholders a fair price, adding that the company would be able to continue its successful growth strategy under its own name and as an independent unit within a financially- and industrially-strong corporate group.
Saia stated that standing alone was no longer a viable option and its decision to abandon its original goal of remaining independent was essentially down to two developments.
It said there had been a marked change in shareholder structure in recent weeks, with private shareholders selling their holdings, while institutional investors had built up their positions.
And despite “considerable efforts”, the company had been unable to develop a stable base of investors with a long-term horizon.
Bigger board
The statement said Johnson Electric wanted to retain the existing Saia management, while adding two members of its own to the present board of directors.
“I believe that we can count on the Saia-Burgess management to implement their strategy and to achieve the set targets,” commented Johnson Electric’s chairman and chief executive Patrick Wang.
“I envision that this acquisition will yield exciting innovations with high value to our customers,” he added.
Saia has set a goal of SFr1 billion in sales and an operating profit of SFr100 million by 2008.
In light of the new situation, Saia-Burgess has postponed the extraordinary shareholders’ meeting scheduled for August 30 to a new date, probably in mid-October.
A statement from Johnson Electric said it expected to assume SFr117.5 million net debt in connection with the offer.
swissinfo with agencies
Johnson Electric is a large provider of micro motors and integrated motor systems in the automotive, power tools, home appliances, business equipment, audio-visual and personal care sectors.
The group employs more than 33,000 people in 15 countries and recorded sales of $1.144 billion in its fiscal year ending March 31, 2005-08-26
It is listed on the Hong Kong Stock Exchange and is part of the Hang Seng index.
Johnson Electric’s offer for Saia-Burgess is SFr1,060 per share, valuing the Murten-based company at about SFr696 million.
Saia has welcomed the move and urged shareholders to accept the offer.
The company is trying to fend off a hostile bid from Japan’s Sumida.
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