Weir Group abandons Metso takeover

Metso believes the new all-share offer does not fully value the prospects of the Finnish company

Scottish engineering firm Weir Group no longer intends to pursue a takeover of Metso Corporation, after the Finnish company rejected an improved offer.

The Glasgow-based company said it had made a new all-share offer under which Metso shareholders would have received 0.95 Weir shares per Metso share, a 13% increase to the 0.84 exchange ratio that Weir Group initially proposed.

Weir said: "The board of Metso did not engage with Weir and on 27 May rejected the proposal, based on its belief that the market does not fully value the prospects of Metso and that the proposal significantly undervalues Metso."

“Weir believes it made a compelling proposal but remains financially disciplined and therefore does not intend to pursue this opportunity further at this time.”

Meanwhile the chairman of the Metso Board, Mikael Lilius, said: "We have considered the approaches from Weir carefully and thoroughly. We have also carefully considered the opportunities that Metso has as an independent company and its strong growth prospects.

"We believe that Metso has a real opportunity to create significant value for all its shareholders by pursuing its own course and that the proposal from Weir significantly undervalues this opportunity and that a takeover by Weir at these conditions would not be in our shareholders' best interests."

Weir submitted its all share offer to the Metso board on 27 March.