Daimler, Rolls secure backing with raised Tognum bid

Daimler and Rolls-Royce have secured the backing of Tognum for their takeover of the specialty engine maker by sweetening their offer to €26 a share and lowering the acceptance threshold to 30 per cent.

Tognum said it welcomed the improved offer, which is up from €24 a share, and all members of its supervisory and management board holding shares would tender them.

The increased offer values Tognum at €3.4 billion ($4.83 billion), the equivalent of 11.3 times recent annual core earnings, a discount to rival Cummins, but a premium to Wartsila.

As the bidders have changed the offer price and lowered the acceptance threshold from the original 50 per cent plus one share, the acceptance period will be extended by two weeks to June 1.

"The partners intend to maintain the current manufacturing sites and are confident that the growth strategy will secure jobs and lead to further opportunities," Daimler and Rolls-Royce said in a joint statement on Monday.

Tognum said on Saturday the two bidders had signalled in talks they were willing to raise their bid to €26 if they got Tognum's backing.

A source had told Reuters earlier that Tognum's top management, which owns a combined stake of at least 5 per cent, would come out in support of the higher bid on Tuesday at the latest.

Daimler had earlier said it would not raise its offer, which had been rejected by institutional and retail investors in the maker of large diesel engines.