Asslar, Germany 2/15/17; 2/27/17; 3/15/17; 3/31/17; 4/24/17; Maulburg, Germany 1/24/17; 3/17/17; 3/29/17; 4/25/17; 4/27/17—Publicly held Pfeiffer Vacuum, a manufacturer of vacuum solutions, is urging shareholders to reject a public tender offer from vacuum pump company Busch, concluding that the unsolicited proposal does not offer a premium for majority ownership and is below the current share price.

The March offer price of €110.00 ($122.22 at €0.90 = $1) per share is a 14.3% increase from Busch’s initial offer, made in January, of €96.20 ($106.89) per share. At the time of the original offer, Busch held just under a 30% stake in the company. Regarding the initial offer, Pfeiffer Vacuum told shareholders that it did not offer a “customary premium for acquiring such a controlling interest,” the premium was below comparable transactions, and “the Busch Group may actively interfere with Pfeiffer Vacuum’s strategic setup.” When making the second offer, Busch stated that it plans to operate Pfeiffer Vacuum as a listed company, separate from its own business, with no change to business operations.

Shareholders are expected to vote on the offer at Pfeiffer Vacuum’s annual general meeting on May 23, at which the company is urging a strong shareholder turnout. “In order to reaffirm our interest in a trustful relationship, we proposed a number of binding and forward-looking guarantees to the Management of Pfeiffer Vacuum outlined in a Business Combination Letter, on condition that the Management constructively supports the offer, at least the strategic impetus of it,” said Sami Busch, a managing partners of Busch. As part of the offer, Busch would chair Pfeiffer Vacuum’s Supervisory Board. Pfeiffer Vacuum stated on April 24 that is has not ruled out cooperation with Busch. But the company wrote, “To this day, the Busch Group has not even begun to outline a suitable scheme as to what form a possible concrete cooperation between the two companies would take.”

The tender offer runs April 12 through June 1. According to Busch, the latest offer is a 28% premium over the volume-weighted three-month average price prior to the January offer. On April 24, Pfeiffer Vacuum stated the offer is an 8.3% discount of its share price as of April 11, the last day prior to the second offer.  Busch has held an over 25% stake in the company since fall 2015. Busch’s latest offer is valued at €1.1 billion ($1.2 billion). Pfeiffer Vacuum’s 2016 revenues increased 5.0% to €474.2 million ($526.9 million) (see IBO 3/31/17). The company’s product portfolio primarily consists of high-vacuum pumps, including turbo pumps used in analytical instruments. It also offers the PrimaPlus quadrupole MS and MS-based gas analysis systems.