China’s Xinmao to make all-cash bid for Draka

NOVEMBER 22, 2010 By Stephen Hardy -- Undaunted by the fact that Draka has already accepted a buy-out offer from Prysmian, Tianjin Xinmao S&T Investment Corp. Ltd. has told Draka’s supervisory board that it plans to make a public all-cash offer for Draka’s ordinary shares.

Nov. 22, 2010

NOVEMBER 22, 2010 By Stephen Hardy -- Undaunted by the fact that Draka has already accepted a buy-out offer from Prysmian (see “Prysmian lays out Draka takeover offer”), Tianjin Xinmao S&T Investment Corp. Ltd. has told Draka’s supervisory board that it plans to make a public all-cash offer for Draka’s ordinary shares.

Draka says Xinmao will offer €20.50 in cash per ordinary Draka share. This compares to the offer Prysmian has announced of €17.20 per ordinary share in cash and Prysmian stock.

Tianjin Xinmao S&T Investment Corp. is part of the Xinmao Group and is active in optical communications, among other industries.

The agreement struck with Prysmian allows Draka to entertain bids that surpass Prysmian’s by at least 15%; the Xinmao bid would qualify. The Italian company has the right to counter such an offer. If Draka winds up accepting any bid other than one from Prysmian, Draka must pay Prysmian €12.5 million to sever the current deal.

Draka has said its supervisory board will review the proposal from Xinmao, but has not said when it expects to finish that process.