XP rejects £571m offer as company in play
Cette publication existe aussi en Français
XP Power has firmly rejected a cash offer from Advanced Energy in the US to buy the company for £571m. AE now has until June 18th to increase its offer.
The offer of £19.50 per share from Advanced Energy undervalued the company, said XP Power in a statement, calling it a “series of highly conditional, opportunistic, indicative proposals.”
It also points out that as a Singapore-based company, it is not subject to the jurisdiction of the UK Panel on Takeovers and Mergers which administers the City Code on Takeovers and Mergers. Advanced Energy has undertaken to announce whether it will make a firm offer by June 18 in accordance with Rule 3.5 of the Singapore Takeover Code. It that doesn’t happen the company is prevented from making an offer for six months.
- Advanced Energy announces cash bid for XP Power
- XP Power starts its third factory in Asia .
- XP snaps up Glassman High Voltage after death of founder
AE has gone public with the offer after the rejection. The deal value of £571m includes debt of £103m and would be funded from the $1.0bn of cash on its balance sheet.
“Given the lack of engagement from the Board of XP Power, Advanced Energy believes that XP Power’s shareholders should be made aware of the latest proposal, which represents a compelling and highly attractive opportunity particularly in light of the November 6, 2023 Fundraising and February 16, 2024 Trading Update.”
The latest trading update in March saw Q1 revenue of £64.6m, 15% lower than last year and order intake of £43.7m 27% lower than last year. Sales and order intake in the Semiconductor Manufacturing Equipment sector were at a similar run-rate to that achieved in the second half of 2023 but sales and order intake in the Healthcare and Industrial Technology sectors slowed as customers continued to destock. Revenue in Q2 is likely to be slightly lower than Q1 due to ongoing customer destocking, but the company expects trading to improve during 2024 as channel stock levels reach equilibrium and as demand for Semiconductor Manufacturing Equipment begins to increase. The order book at the end of Q1 was £171m and the Board of XP notes that trading for 2024 has been in line with its expectations.
- Liquid cooling for configurable 20kW power supply
- XP Power acquires EMCO to broaden high voltage
- XP buys Comdel to expand RF power supplies
AE says the deal would reducing cyclicality as part of a larger company with a broader global market presence and is consistent with its strategy of growing through acquisitions.
“We believe that the proposed offer for XP Power provides compelling value for both Advanced Energy’s and XP Power’s shareholders,” said Steve Kelley, the president and CEO of Advanced Energy. “By expanding our portfolio of products and technologies, and combining our technical capabilities, we believe we will be better able to meet the growing needs of our customers.”
For semiconductor equipment use cases, the acquisition of XP Power would expand a portfolio of embedded system power solutions which would broaden Advanced Energy’s ability to support its OEM customers. For Industrial and Medical applications, the acquisition of XP Power would complement Advanced Energy’s offerings and extend its geographic footprint with an expanded presence in the US, Europe, and Asia Pacific.
www.xppower.com; www.advancedenergy.com
If you enjoyed this article, you will like the following ones: don't miss them by subscribing to :
