General Motors has Kirk Kerkorian. The Swedish truckmaker Scania and its German rival MAN, on the other hand, have ... er, Bernd Pischetsrieder of Volkswagen. The chief executive of the German carmaker is not your typical activist investor but, having started out with a weakish hand, he has grabbed the controls in the MAN/Scania takeover saga.
For a while on Monday, it seemed Scania might see off MAN’s hostile bid but the devil is in the detail. In fact, MAN said it would consider withdrawing its bid only “under certain conditions” and those conditions remained unclear. Meanwhile, Volkswagen, which has 15 per cent of MAN’s stock as well as a 34 per cent voting stake in Scania (which Mr Pischetsrieder chairs), is turning the screws. VW says it wants the two to reach an agreement on a friendly basis in the next four weeks, but the language is tough: it now only “prefers” a deal that neither side perceives to be hostile and won’t accept one that sacrifices potential synergies. It stands to own at least 20 per cent in a merged MAN/Scania, into which it would then fold its own Brazilian truck business.
VW’s stated focus on industrial logic, rather than a few kronor here or there on the share price, may well give MAN scope to offer enough of a premium to satisfy Sweden’s Wallenberg family, who, through their vehicle Investor, control 30 per cent of Scania. Talk of a reverse takeover by Scania seems far-fetched – particularly given the drop in its share price on Monday and the presence of hedge funds hoping to be on the receiving end of a bid.
VW, with a foot in each camp, can afford to be relatively sanguine about the precise cost of the transaction. MAN shareholders without this hedge may have more to worry about.
Copyright The Financial Times Limited 2006
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