Scania rejects $12.2 bn bid by MAN

The board of directors of Swedish truck marker Scania AB, which met yesterday, decided not to support a proposal outlined in a letter received from MAN AG for a possible offer on Scania.

MAN AG today made a public offer for all the shares in Scania AB, and said would offer 38.35 euro in cash and 0.151 new MAN shares for each Scania share valuing Scania at 48 euro.

MAN's offer is conditional on it getting 90% of Scania stock.

According to a release on the website of Scania, "On 13 September, 2006 the board of directors of Scania AB received a letter from the chairman of the executive board of MAN AG describing a possible offer on Scania. In all material aspects, the public offer is in line with the contents of the above letter.

"At a board meeting held on 17 September 2006, the board of directors carefully studied the contents of the letter and have, after having engaged professional advisors to assist in its review and assessment of the proposal, unanimously decided not to support the proposals outlined therein. On Sunday 17 September, the board of Scania promptly informed MAN AG of its decision."

Updated at 1300 hrs: German industrial conglomerate MAN AG today made a 9.6 billion euro ($12.2 billion) bid in cash and stock for Sweden's Scania AB.

MAN said it would pay 38.35 euro in cash and 0.151 new MAN shares for each Scania share valuing the stock of the Swedish truck maker at 48 euro per share.

The deal values Scania at 16 times expected 2006 earnings, but below the global average for commercial vehicle makers of 18 but a premium to the PE of 11 for larger rival Volvo AB.