Square D Approves French Buyout Bid
PALATINE, Ill. (AP) _ Square D Co. has accepted a sweetened $2.23 billion takeover offer from Groupe Schneider, dropping months of resistance to being acquired by the Paris-based electrical equipment giant.
″We are pleased that we have been able to reach an agreement with Schneider that substantially improves the terms of its offer and provides Square D stockholders with fair value for their shares,″ Jerre L. Stead, chief executive officer of Square D, said Sunday.
Groupe Schneider sweetened its offer by $10 a share to $88. The offer was extended until May 28.
In trading today on the New York Stock Exchange, Square D soared $6.37 as share to $87.37 1/2 . On Friday, the stock rose $1.75 a share to $81.
″The combined Schneider and Square D represents a truly international enterprise and as such should significantly enhance the long-term potential of both companies,″ said Didier Pineau-Valencienne, chairman of Groupe Schneider.
Square D also makes electrical products. Schneider plans to put its American operations under Square D’s control, Pineau-Valencienne said. He said there were no plans to move Square D from this northwest Chicago suburb or to close any of its facilities or those of Schneider’s in the United States.
His company had first launched a friendly buyout offer in February. Square D executives had rejected the original offer, saying they believed it was in their best interests to remain independent.
Schneider then started a hostile takeover bid that was met with legal action by Square D.
Square D had been delaying its annual meeting in attempts to buy time to stave off Schneider, which had begun a proxy fight to oust Square D’s board of directors and management. The French company had attracted 71 percent of Square D’s shares, enough to oust the board.
Questions had been raised about whether the merger would violate U.S. antitrust laws but the Justice Department said Friday it would not contest the combination.
The companies agreed to drop all litigation. Schneider said it will withdraw the proxy fight, and Square D plans to cancel its annual shareholders meeting.