Metso's Board of Directors rejected new approach from Weir
(GlobeNewswire Via Acquire Media NewsEdge) HELSINKI, Finland, May 28, 2014 (GLOBE NEWSWIRE) -- Metso Corporation's stock exchange release on May 28, 2014 at 10:25 a.m. local timeMetso Corporation confirms information released by The Weir Group relating to its latest proposal to Metso concerning a potential business combination of the two companies. Following thorough and careful consideration of the interests of the company's shareholders, Metso's Board of Directors decided to reject also this revised proposal. The Board concluded that the revised proposal continues to significantly undervalue Metso and the value to shareholders of Metso continuing as an independent company pursuing its own growth strategy.
The revised proposal was based on an assessment of the value of Weir and Metso shares and proposed an exchange ratio of 0.95 Weir shares per Metso share, a small increase on the initial exchange ratio of 0.84 Weir shares. In their revised proposal, Weir calculated that the proposal placed an implied value of EUR 29.40 on Metso shares, based on the market price for Weir share and currency exchange rate on May 19, 2014. This exchange ratio would imply an ownership of 40% in the combined company for Metso's shareholders, compared to 37.1% for the initial offer.
Metso is a leading process performance provider, with strong positions in the mining, construction, and oil & gas industries. All of its core businesses have significant opportunities for growth. Metso has successfully completed the demerger of Valmet Corporation and the Board believes that the company and its management team have significant opportunities to deliver substantial value to shareholders in its different end markets across mining, construction and automation.
The mining capital equipment market is currently experiencing a trough, and historical benchmarks indicate there is room for upside in the market when the investment cycle turns. Weir's offer is made at a timing when the mining capital equipment business is at a low point in the cycle. In addition, the management of Metso is focused on delivering financial performance through a range of initiatives like the ongoing cost efficiency program and the development of its services business. Based on these factors, amongst others, the Metso Board firmly believes that the Weir revised proposal significantly undervalues Metso's prospects. Also the timing of the revised proposal is opportunistic given the relative position in the cycle of the respective end markets of Metso and Weir.
"We have considered the approaches from Weir carefully and thoroughly," says Mikael Lilius, Chairman of the Metso Board. "We have also carefully considered the opportunities that Metso has as an independent company and its strong growth prospects. We believe that Metso has a real opportunity to create significant value for all its shareholders by pursuing its own course and that the proposal from Weir significantly undervalues this opportunity and that a takeover by Weir at these conditions would not be in our shareholders' best interests."Metso is a leading process performance provider, with customers in the mining, construction, and oil & gas industries. Our focus is on the continuous development of intelligent solutions that improve sustainability and profitability. Metso's shares are listed on the NASDAQ OMX Helsinki Ltd. Metso employs around 16,000 professionals in 50 countries. Expect results.
Further information, please contact:
Mikael Lilius, Chairman of the Board, Metso Corporation, tel +358 20 484 3001
VP, Investor Relations
NASDAQ OMX Helsinki Ltd
Source: Metso Corporation
2014 GlobeNewswire, Inc.
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