Metso rejects Weir merger proposal

16th Apr 2014 09:42

A merger proposed by engineer Weir Group has been rejected by the board of Finnish natural resources and construction services group Metso. The company, which had proposed merging with Metso to give the latter's shareholders a 37% stake, said it believed its "attractive" offer was based on a "compelling strategic rationale" and had not yet decided if it would make a revised proposal.Metso issued its own statement saying it believed the proposal was not in the best interest of its shareholders and that it "remains extremely positive and confident in Metso's standalone growth and value creation prospects by pursuing its current strategy".Under the proposed all-share merger, Weir had offered Metso shareholders 0.8400 Weir shares per Metso share, which it said would enable the shareholders of both companies to "share in the very significant value creation that would result from material cost synergies", in addition to the additional revenue synergies it expected to be generated through the combination. FTSE 100-listed Weir explained that it had proposed that the combined company would have "a significant presence in, and a long term commitment to, Finland as well as the UK". It had planned for the merged company to be listed in both Finland and the UK, and that it would have shared management and board responsibilities. The group said it would make a further announcement on the matter "if appropriate". Weir's share price inched 0.08% higher to 2,541p by 09:55.NR