Recticel plans to sell its crown jewel, the flexible foam division. It already has a binding offer in its pocket. This puts the Austrians a big chop.
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The move of the industrial group Recticel is rather unprecedented: to sell your core activity to make yourself unattractive to your attacker. Recticel does this through its flexible foam core activity, which Greiner was all about when it secretly bought itself in Recticel last year.
Recticel announced today that that department is going out. It already has a binding offer from the American Carpenter from Virginia. The Americans are offering 656 million euros (without debt and without cash), which amounts to 11.65 euros per (diluted) Recticel share. The transaction must be approved by the shareholders of Recticel, including the uninvited shareholder Greiner.
Greiner owns 27 percent of Recticel. Greiner currently has a bid on Recticel at EUR 13.50 per share. But Recticel and its board of directors consider that to be well below the real value.
By selling the flexible foam division, Recticel is now making itself unattractive to Greiner. The decision to sell the flexible foam division can be taken by a normal majority. This means that if enough shareholders show up and vote in favor of the sale, Greiner will miss out. Because Greiner has 27 percent, it is in principle sufficient that slightly more than 27 percent of the shareholders show up, provided they all support the sale.
Recticel itself says that the insulation department will become the new core activity in which it sees its future. Initially, it was expected that it would also be released in due course as part of the expansion of the flexible foam division.
Kingspan
Recticel’s ‘bedding’ department is currently also on display. Recticel’s move is very far-reaching and represents a major strategic turn. But it might be the only way to pto shake off Greiner’s eyes. However, the move is not without risk. A Recticel without flexible foam and without a bedding, on the other hand, is tailored to ambitious groups such as the Irish Kingspan and or Mohawk. Kingspan once bid in the insulation department. Both are competitors of Recticel in insulation. The question is whether the competition authorities would allow such bundling.
Higher offer?
It is now time to watch what Greiner does in the short term. Is Greiner increasing his offer for Recticel? This would enable Greiner to acquire additional shares and prevent the flexible foam division from being sold at the decisive shareholders’ meeting in early December. But to be able to vote with those shares, Greiner would have to shorten his bidding period considerably and adjust his prospectus. Whether all this can be done in time remains to be seen.
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