VTG Aktiengesellschaft’s Executive Board and Supervisory Board announced it would do not accept the offer by Morgan Stanley Infrastructure Inc., following a voluntary public takeover offer to all shareholders of VTG by Warwick Holding GmbH.
In July, Warwick Holding GmbH, an indirect subsidiary of funds advised by Morgan Stanley Infrastructure Inc., which holds approx. 29% of the shares in VTG Aktiengesellschaft, announced its decision to make a voluntary public takeover offer in the form of a cash offer, to all shareholders of VTG Aktiengesellschaft at an offer price of EUR 53 per share.
According to VTG, “the offer price of EUR 53 per share does not reflect the fundamental value that VTG can generate as an independent company. Thanks to its long-standing experience and high-level technical expertise, VTG is one of the market leaders and at the forefront of innovation in the European railcar leasing and rail logistics market. Due to an attractive market environment, the strengthening of the business model by the proposed acquisition of the CIT Rail Holdings (Europe) SAS (“Nacco acquisition”), and the digitization strategy initiated by the company, VTG has excellent growth prospects.”
“We recommend to our shareholders not to accept the offer by Morgan Stanley Infrastructure Inc. as the consideration offered does not reflect the fundamental value and the future potential of VTG. Nor does the offer contain an appropriate control premium – it is substantially lower than for comparable transactions,” Heiko Fischer, Chairman of the Executive Board of VTG Aktiengesellschaft said.
With a 4.3 % premium on the volume-weighted three-month average share price on 13 July 2018, the offer price does not contain an appropriate control premium. By comparison, the average control premium paid over the last ten years for German companies with an equity value exceeding EUR 1 billion was 27%.
Furthermore, the offer is significantly lower than the EBITDA multipliers achieved in comparable M&A transactions in the adjacent European locomotive hiring business and for market-leading quasi-infrastructure companies in the German-speaking markets in recent years
On August 5, the Executive Board and the Supervisory Board of VTG Aktiengesellschaft published their joint reasoned opinion pursuant to Section 27 of the German Securities Acquisition and Takeover Act on the voluntary public takeover offer by Warwick Holding GmbH.
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