FRANKFURT (Reuters) – Finland’s Kone (KNEBV.HE) has offered roughly 17 billion euros ($18.9 billion) for Thyssenkrupp’s (TKAG.DE) prized elevator division, a preliminary bid which two people familiar with the matter said topped rival suitors.
FILE PHOTO: Thyssenkrupp’s logo is seen close to the elevator test tower in Rottweil, Germany, September 25, 2017. REUTERS/Michaela Rehle/File Photo
Reuters and Bloomberg reported the approach by Kone earlier on Tuesday, prompting a statement from the Finnish elevator maker, which said its non-binding offer was “reasonably close to the value circulating in the media”.
Kone’s offer represented an premium of about 1 billion euros over the best offer from leading competitors from the private equity world, according to one of the sources.
The deputy chairman of German conglomerate Thyssenkrupp’s elevator division, Knut Giesler, who is a union chief, said Japan’s Hitachi (6501.T) had also put in an unspecified bid, confirming earlier reports. Giesler added a buyer would likely be picked at the middle or the end of February.
Other suitors for the elevator business include a consortium of buyout groups Advent and Cinven and the Abu Dhabi Investment Authority, which are working with Germany’s RAG Stiftung, Reuters reported last week.
The sales process is still ongoing and the field of bidders will get more opportunity to amend their offers, the sources said.
Kone cautioned in its statement that its proposal was based on certain assumptions and that the terms of a potential binding offer could be subject to change.
Still, it said it saw a “highly complementary geographical footprint of the businesses, substantial value creation on offer from synergies, and joint innovation potential in an operating environment increasingly shaped by digitalization”.
Kone boss Henrik Ehrnrooth had said earlier on Tuesday that he was very interested in the elevators unit and saw significant “scale advantages”. He was speaking after his company reported quarterly profit that beat expectations.
Kone, which is working with private equity firm CVC, was due to make a bid on Monday for the unit, previously valued at around 15 billion euros.
Ehrnrooth said he believed Kone would not be interested in just a minority stake.
Bloomberg earlier reported on the offer, saying Kone was seeking to clearly outbid private equity rivals to offset any concerns over antitrust scrutiny of the transaction.
One of the sources, however, said concerns about an antitrust review persisted even at the current premium.
Additional reporting by Tom Kaeckenhoff; Editing by Edward Taylor and Pravin Char