German Takeover Battle Looms as Grammer Surges on Rejected Bid

(Bloomberg) -- Grammer AG’s second-largest investor rejected a buyout offer by affiliates of its biggest shareholder, China’s Ningbo Jifeng Auto Parts Co., setting the stage for a renewed power struggle for the German seatmaker.

The 60-euros-a-share offer announced Tuesday is “unsatisfactory,” according to a statement from Cascade International Investment GmbH, controlled by the billionaire Bosnian Hastor family. A more realistic value following Grammer’s recently announced acquisition of Toledo Molding & Die in the U.S. would be 100 euros ($116) a share, according to the statement. Through Cascade and Halog GmbH, the Hastor family controls about a 19 percent stake in Grammer.

“Even though we’re not happy with the current performance of the company, we still believe in its enormous potential,” Cascade said. “We will now evaluate all available options, including the further expansion of our stake,” it said.

Shares of Grammer spiked, adding to Tuesday’s surge. Jifeng Auto, holder of a 25 percent Grammer stake, was first brought on as an owner last year to fend off a push for control by the Hastor family, which has been involved in a supply dispute with Volkswagen AG. Jifeng Auto’s offer, first reported by Bloomberg, values the German company at 770 million euros, 19 percent above the stock’s price before the takeout offer was announced.

Grammer shares advanced 7 percent to 65.50 euros in Frankfurt on Wednesday after Bloomberg reported that the Hastors had rejected the bid. The stock’s rise, following Tuesday’s 19 percent gain, brought Grammer’s market value to 826 million euros, well above the offer price.

Cascade said that “important information” is missing related to Jifeng’s buyout proposal, including who would get access to Grammer technology and how a relatively small Chinese manufacturer with 250 million euros in revenue can finance a transaction over more than 1 billion euros. “Are state-owned entities involved here as sponsor or investors?” it said.

A spokesman for Jifeng Auto declined to comment, referring to an interview with board member Wang Jimin published by Handelsblatt earlier Wednesday. The Wang family owns 73 percent of Ningbo Jifeng and the Chinese government has no influence, he told the newspaper. The offer price is final, Wang said.

The fight for control last year with the Hastor family triggered a drop in orders as automakers placed contracts with rivals to reduce risks for potential supply disruptions. Grammer CEO Hartmut Mueller said in March the manufacturer was hoping to largely make up for the lost orders in the course of this year, an effort that would potentially be complicated if tensions were to flare up again.

©2018 Bloomberg L.P.