ING balks at Tognum offer price

FRANKFURT (Reuters) – Tognum (TGMG.DE: Quote, Profile, Research) shareholder ING Groep (ING.AS: Quote, Profile, Research) said it would be “extremely disappointed” if the diesel engine maker’s management recommended that investors accept a 3.2 billion euros ($4.6 billion) takeover offer.

German carmaker Daimler (DAIGn.DE: Quote, Profile, Research) and British engine maker Rolls-Royce (RR.L: Quote, Profile, Research) last month made a joint bid for Tognum at 24 euros per share, a price that was rejected by the target company as too low.

Dutch bank ING, which holds a 9 percent stake in Tognum, said in a letter to Tognum’s management, obtained by Reuters on Monday, that it sees Tognum’s fair value including a portion of expected synergies from a tie-up at 30-32 euros per share.

Even without synergies, Tognum shares are worth 27-29 euros apiece, ING added.

“We perceive a takeover bid at 24 euros per share as materially undervaluing Tognum on a stand-alone basis and not reflecting any of the synergies involved,” ING said.

It said it planned to take an active stance in the takeover proceedings to protect its commercial interests, without being more specific.

“We have read that (letter) with great interest, but we cannot comment on it,” a spokeswoman for Tognum said.

Tognum previously said it would not make any further comment on the approach until it has received a written offer from Daimler and Rolls-Royce.

Daimler, which said last month it does not intend to pay more than 24 euros per share, reiterated its stance on Monday. Rolls-Royce declined to comment.

Tognum’s shares were up 1.0 percent at 1212 GMT (8:12 a.m. ET) to 25.67 euros. The stock has traded above the 24 euro-per-share offer price since plans for a deal were announced last month as investors bet on a sweetened bid.

If the two bidders succeed with the takeover, Rolls-Royce will expand its marine and diesel power business. Daimler will re-establish closer ties with a major buyer of its truck diesel engines, which are retooled by Tognum for other purposes.

The two hope to tap into a global market worth more than 30 billion euros a year that is growing at above-average rates.

(Reporting by Christoph Steitz and Alexander Huebner; Additional reporting by Andreas Kroener and Rhys Jones; Writing by Maria Sheahan; Editing by Hans Peters and Mike Nesbit)

($1=.7031 euros)

ING balks at Tognum offer price