Cable-maker Nexans to launch Draka takeover bid

AMSTERDAM/PARIS (BestGrowthStock) – France’s Nexans (NEXS.PA: ), the world’s largest cable maker, has agreed to buy a 48.5 percent stake into Dutch rival Draka (DRAK.AS: ) and plans to make an offer for the rest of the company.

Nexans said on Monday it has agreed to buy the Draka stake from Flint Beheer, the investment fund of the Fentener van Vlissingen family, without disclosing the price.

It wants to start talks with Draka to buy the rest of the company for 15 euros per share, Nexans said.

The financing to be put in place for that deal, which would value the 51.5 percent stake in Draka at 376.5 million euros, would ensure keeping a sound financial structure for the group, Nexans said, without providing further details.

Draka said Nexans’ approach was unsolicited.

“The contemplated transaction would contribute to the consolidation of the cable sector, improve the competitiveness of Nexans’ European asset base and reinforce its positions in specialty cables,” Nexans Chief Executive Frederic Vincent said in a statement.

Draka shares were down 0.5 percent at 15.23 euros by 0938 GMT. Nexans shares were up 1.7 percent at 54.01 euros.

Nexans’ offer would be subject to approval by Draka’s management and a 95 percent acceptance threshold, the company said.

Nexans shares trade at 16.7 times 12-month forward earnings, compared with Draka’s 13.1 times, according to Thomson Reuters Starmine, which weights analysts’ forecasts according to their past accuracy and timeliness.

(Reporting by Greg Roumeliotis and Giles Guillaume; Editing by Erica Billingham)

Cable-maker Nexans to launch Draka takeover bid