It doesn’t happen often, but it now seems to be happening in the bidding war for electronics company Neways: the outsider, in this case the Twente investor Bernard ten Doeschot, wins.
While: what could not be more obvious in the situation at Neways than that the insider wins? The insider here is the ubiquitous industrial family business VDL.
Check it out. VDL and Neways know each other through and through. They are industrial partners and together they make products for, for example, chip machine manufacturer ASML. That is why VDL was also interested in making a takeover bid for Neways and adding the company (2,700 employees) to VDL (15,000 employees). They are also locals. VDL has several factories in and around Eindhoven, Neways is located in Son en Breugel. In addition, VDL has been Neways’ largest shareholder for years, with a stake of over 27 percent.
Investor from Enschede
VDL (turnover in 2020 4.6 billion euros) therefore saw a bargain. But as it stands, an industrial investor from Enschede, not so well known in Eindhoven, will become the new owner.
He is Bernard ten Doeschot. He also saw a bargain. In recent days, he has reached an agreement with the management and supervisory board of Neways about a bid that is higher than that of VDL.
Ten Doeschot has received the public support of the top of Neways
His investment company Infestos offers 14.55 euros per Neways share, VDL ‘only’ 13 euros. Neways and several smaller shareholders thought that this VDL offer was too low.
Moreover, Ten Doeschot has also received the open support of the top of Neways. And it was precisely that support that VDL lacked. An agreement with the management and supervisory board is an important step towards a successful takeover in ‘the Netherlands consensus country’. Management must align the interests of all parties involved, from shareholders to employees. Whoever has the management behind him, has almost won the company.
That would be an unexpected bribery. VDL and Neways started takeover talks in May. But they were soon torn down. Then, unexpectedly, VDL made a hostile takeover bid with the higher price of 13 euros per share. Such bids without the approval of the management are rare in the Netherlands and only succeed if the price offered is mouth-watering.
More than metal
But VDL did not go that far. The family concern thought that for not too much money – the offer from VDL valued Neways at around 150 million euros – it would become a lot bigger in electronics in one fell swoop.
VDL is very interested in this. In recent months, the group has made it emphatically clear that it has more ambitions than working on metal. It wants to equip the machines and products it makes, from stable installations to buses and cars, with electronics as much as possible – that is efficient and improves its competitive position. At the end of 2020, it took over TBP Electronics: a small South Holland company that makes electronics for industrial machines, among other things.
With Neways, the largest acquisition ever for VDL in terms of staff numbers, it would become a lot bigger in that area all at once. Far too easy, complained Neways and some shareholders such as the Amsterdam Add Value Fund. They paint the picture of a frugal VDL that saw a bargain.
Neways had just come out of a difficult period. A reorganization cost 300 jobs. New CEO Eric Stodel was executing a new strategy. With this, Neways wants to become less dependent on the car industry. VDL would now like to take over the business quickly before the company started to run better – and thus become more valuable.
That was not the aim of the Neways summit. After years of cooperation, the atmosphere between the two industrial companies quickly became icy. Neways sent out a press release after VDL’s hostile offer in which it wrote that it had learned of the offer through the media.
On Friday morning, VDL, in turn, seemed surprised by the counter-offer. The company intended to submit an official offer document to the Netherlands Authority for the Financial Markets on Monday. Friday was the last day on which VDL had to make this public according to the legal deadlines, a press release had already been prepared.
Also read this extensive story about industrial company VDL in corona year 2020: Father Van der Leegte has to come along to convey the emotion
With its higher bid, Infestos, which has its office in the former villa of a textile baron from Twente, is ahead. In its bid, VDL could count on the share package of more than 28 percent of ZBG Capital from investor Frank Zweegers. But he can do without his promise to VDL, because Infestos offers a significantly higher price.
Ten Doeschot, who bought 3 percent of the shares shortly after the first talks between VDL and Neways, is aiming for a majority stake in Neways. But you can read between the lines of his announcement that he does not rule out the possibility that VDL will also sell his shares to him. VDL said on Friday afternoon it would keep all options open, including matching Ten Doeschot’s offer.
A successful takeover would confirm his fame as an industrialist. He made a fortune selling chemical company Norit in 2007. Since then, he has invested considerable sums in new industrial companies, such as Alfen (charging stations) and NX Filtration (water treatment). Infestos successfully launched both on the stock exchange. Now he is not a seller, but a buyer.
A version of this article also appeared in NRC Handelsblad on 26 June 2021
A version of this article also appeared in NRC in the morning of June 26, 2021