Daily Management Review

Europcar Deal Is Attractive, Says Volkswagen As It Cancels Hopes For Higher Bid


Europcar Deal Is Attractive, Says Volkswagen As It Cancels Hopes For Higher Bid
Volkswagen virtually cancelled all hopes for a higher bid for France's Europcar as the German auto making giant said that it completely believed that the 2.9 billion euro ($3.3 billion) offer made for the French company, which was made as a part of an offer made by a consortium, was fair enough to cover for the market value of the French company.
"With a takeover premium of 30-40%, depending on the reference point, we have presented a very attractive offer," Christian Dahlheim, Volkswagen's head of group sales and one of the main architects of the deal, told Reuters.
The consortium which comprises of asset manager Attestor Limited, Dutch mobility group Pon Holdings BV and Volkswagen made an offer of 0.50 euro per share of Europcar, which the Volkswagen said that could additionally have an added 0.10 euro per share if 90 per cent of the shareholders of Europcar accepted the offer.
The current share price of Europcar is at 0.508 euros apiece.
This offer, which was first made public in July this year and was launched on Friday, the consortium has given a deadline till December 30 at least to the investors of Europcar to tender their shares.  
About 68 per cent of the French company’s shareholders and investors have already agreed to sell of their share and accept the deal and this would hand over overall control of the French car rental group to the consortium, according to the acquisition rules of France.
"We will enter the mobility sector in the short-term. The acquisition of Europcar is clearly our preferred option," Dahlheim said.
He said that an effort for a speedier implementation of its strategic plan for the French company is still being targeted by the consortium, Green Mobility Holding.
The plans of the consortium include making investments in the huge international network in more than 140 countries of Europcar – which includes a fleet of about 350,000 vehicles, as a strategy to sell lucrative mobility services.
"We are buying Europcar because we believe that we can develop it towards a good basis for an expanded mobility offer," Dahlheim said, adding he expected European antitrust authorities to approve the transaction at the beginning of next year.
Dahlheim said that Europcar's cash flows would be used for funding of all investments in the company for its future growth.