Shareholders at Balda AG will go to the German group's annual meeting at the end of this month to vote on a 74 million euro ($78.8 million) takeover offer for the company from Heitkamp & Thumann Group. The latter has outbid Paragon Partners, which made a 62.9 million euro ($67 million) offer that was initially accepted by Balda in late September.
On Sept. 23, Balda announced the sale of all its operating subsidiaries in Europe and the U.S. to Paragon Partners subject to approval by the shareholders and anti-trust authorities. On Oct. 1, Heitkamp & Thumann submitted a higher notarized offer for all its operating subsidiaries and included a retroactive effect of the agreement to July 1, matching a similar feature in Paragon's offer.
On Oct. 20, Paragon responded by submitting a higher offer. Balda said it agreed with Paragon's requirement that “both the improved offer and the purchase agreement already concluded would be rendered obsolete entirely in case H&T or a third party increased their offer to at least 74 million euros. In this case, an indemnity payment of 1.4 million ($1.49 million) was agreed.”
Then on Oct. 30, Heitkamp & Thumann did just that, increasing its bid to the 74 million euro level, overriding the Paragon offer,
Peter Schmelzer, general partner at Heitkamp & Thumann, which makes metal and plastic components, said in an Oct. 30 statement: "The operating Balda companies complement the production and manufacturing expertise of our Presspart Division in an excellent manner. We offer all employees an attractive future perspective as part of a long-term oriented family owned group of companies."
Balda said that “due to the complexity of the situation,” it has scheduled the annual meeting in Hanover to last for two days, Nov. 30 and Dec. 1.
Balda's supervisory and management boards have recommended shareholders to approve the Heitkamp & Thumann offer.
Michael Pfister, a press consultant working for Balda, confirmed that Paragon Partners has withdrawn its offer. He said no other bidder has come forward and the Heitkamp & Thumann offer is currently the only one that shareholders will vote on. He added that a large shareholder group already said on Nov. 17 that it recommended acceptance of the offer.
In Balda's first quarter 2015/16 (July to September 2015), consolidated sales were 21.3 million euros ($22.6 million) a 2.8 percent increase year-on-year. EBITDA after extraordinary items was 1.7 million euros ($1.81 million) in the quarter, up from 1.5 million euros ($1.59 million) in the previous year's first quarter.
In its results announcement, Oliver Oechsle, sole management board member of Balda, said: "The recent developments and the interest of potential buyers in our operating units clearly show that Balda is on the right path and has great growth potential. The market has recognized Balda's expertise and its transition to a developer of high-end and sophisticated plastics solutions. In view of the current situation, the Supervisory and Management Boards therefore recommend to approve the [Heitkamp & Thumann] offer."