Ingenico shares hit after Safran blocks foreign bid

PARIS (BestGrowthStock) – French payment services provider Ingenico’s (INGC.PA: ) shares fell on Monday after a takeover offer from a U.S. buyer was scuppered by opposition from its top shareholder, state-backed defense group Safran (SAF.PA: ).

Safran (SAF.PA: ), 30 percent owned by France and which holds 22.5 percent of Ingenico, likely blocked the 1.44 billion euro ($1.9 billion) offer as a result of government pressure to prevent the company passing into foreign hands, analysts said.

French industry minister Eric Besson said the state was talking with Safran, adding Ingenico was a “strategic” business.

“The state considers it to be an essential company for the French electronics industry and, personally, I am glad the board judged yesterday that the offer was not interesting enough,” Besson told LCI television.

Ingenico, which provides handheld and countertop devices allowing people to make secure credit card payments, said on Friday it had received an approach worth 28 euros per share. Sources told Reuters the bid was from U.S. industrial conglomerate Danaher (DHR.N: ).

Shares in Ingenico, which has more than 15 million terminals deployed across 125 countries, were down 6.1 percent at 25.90 euros at 1430 GMT.

France has a track record of blocking foreign takeovers on the grounds of ‘economic patriotism’, a term coined under prior President Jacques Chirac in the name of protecting domestic companies and jobs.

Last year, state-owned nuclear reactor maker Areva (CEPFi.PA: ) rejected U.S. and Japanese bids for its transmission and distribution (T&D) unit in favor of a domestic consortium, after a politically charged bidding process.

Other examples include the government-engineered merger of state-owned utility GDF (GSZ.PA: ) with smaller utility Suez to head off a possible bid by Italian energy group Enel (ENEI.MI: ) for Suez in 2006.

BIG DISCOUNT

Danaher’s offer came after several months of talks between Ingenico and potential buyers, a person familiar with the matter said. Earlier talks also involved foreign suitors, including private equity firms such as Bain Capital, BC Partners (BCPRT.UL: ), Blackstone Group LP (BX.N: ) and Providence Equity Partners.

The person familiar with the matter said Danaher chief executive Larry Culp, advised by Deutsche Bank, flew to France in recent days to discuss a possible deal for Ingenico.

But, this person said, Danaher felt unable to submit a binding offer after Safran made a last-minute demand it retain a minority stake following any takeover.

Traders said a takeover now looked less likely. “Ingenico shares are paying the price for the state’s intervention,” a Paris-based trader said.

“Ingenico is strategic only in its biometric identification activity. The fact the state is sticking its nose in this deal has put a big discount on the shares.”

A Paris-based analyst said: “If we exclude any takeover by a foreign company, the only remaining scenario would be the entry of France’s sovereign wealth fund (FSI).”

French parliamentarian Bernard Carayon, who sits on the FSI’s strategic advisory board, said it was time for the FSI, “whose mission is to protect our industrial know-how,” to take a stake in Ingenico. Carayon does not sit on the FSI board that decides where it will invest.

The FSI declined to comment. Safran also declined to comment.

(Reporting by Leila Abboud, Marie Mawad, Quentin Webb and James Regan; Editing by Louise Heavens and Dan Lalor)

($1 = 0.7599 euro)

Ingenico shares hit after Safran blocks foreign bid