A somewhat generous offer to take over the remaining shares of German automotive parts supplier Grammer AG has faced disagreement from the company's biggest shareholder, Cascade International Investment GmbH, according to news reports.
On May 29, Grammer said that it had concluded a business combination agreement with its second largest shareholder, China's Ningbo Jifeng Auto Parts Co. .Ltd, for the sales of its remaining shares to the Chinese company.
Based on the agreement, Jiye Auto Parts would buy Grammer shares for a total consideration of 61.25 euros per share ($71.64), which Grammer said was 19.4 percent over the closing price of its shares as of May 28.
Jiye Auto Parts is part of Jifeng Auto, which increased its stakes in the German auto supplier to 25 percent in October last year.
This, however, has reportedly been rejected by Cascade, which is controlled by the Bosnian billionaire family, Hastor.
Cascade said in a May 30 statement to Bloomberg that it found the offer ”unsatisfactory" in light of Grammer's recent acquisition of U.S. molder and mold maker, Toledo Molding & Die of Toledo, Ohio, on May 22.
According to the statement, a more realistic per-share price would be around 100 euros ($117).
“We, too, have heard from the media that Cascade believes the shares should be in the region of 85 euros ($99) or even 100 euros, but this has not been officially communicated to us,” Grammer Vice President of Communications Ralf Hoppe told Plastics News Europe.
He added that the offer by the Chinese group has not been officially published.
“They are preparing the offer documentation and will be filing it with German financial authorities soon,” Hoppe added.
Once the offer is officially published, a four-week period will start for shareholders to weigh the deal.
Grammer's regular shareholder meeting is set for June 13, where Hoppe expects the issue to be further discussed.
According to a May 30 Bloomberg report, Grammer shares rose to 65.50 euros ($77) in Frankfurt on following its report on the rejection of the deal.
Located in Amberg, Germany, Grammer AG specializes in the development and production of components and systems for automotive interiors as well as suspension and passenger seats.
With 13,000 employees, Grammer operates in 19 countries around the world.
The takeover by Ningbo Jifeng Auto Parts Co. Ltd. would represent yet another notch in China's German acquisition belt. Chinese acquisitions in Germany have stepped up in recent years. In 2016, robot maker Kuka AG was bought by Midea Group Co., while that same year, leading machinery supplier KrausMaffei Group was taken over by Chinese state company ChemChina.