Rockwell Automation Rejects Third Proposal From Emerson -- 2nd Update
November 22 2017 - 11:59AM
Dow Jones News
By Imani Moise
Rockwell Automation Inc. on Wednesday rejected a third takeover
offer from Emerson Electric Co., saying the unsolicited proposal
undervalued the company and Rockwell is better off on its own.
Emerson last Thursday sweetened its takeover proposal to a 60%
cash and 40% share offer valued at $225 per share at the time.
Emerson's shares fell after news of the increased offer. Rockwell
said that based on Emerson's closing price Friday, the offer was
worth about $218 per share, or a 17% premium to Rockwell's stock
price before Emerson began its public pursuit of of the
company.
Rockwell had previously rebuffed offers of $200 per share and
$215 per share, and refused to engage in negotiations, according to
people familiar with the matter.
In a letter to Emerson Chief Executive David Farr, Rockwell
Chief Executive Blake Moret said the company thoroughly considered
the offer with advisers and unanimously decided that the proposal
was not in the best interests of the company or its
shareholders.
"While Emerson may see this proposed acquisition as necessary to
enhance its growth and earnings potential and expand its
capabilities in the industrial automation and information market,
Rockwell Automation does not," the letter read.
Mr. Moret also said Emerson's offer creates long-term risks for
the company and that a combined company might struggle to compete
in a quickly changing market.
A representative from Emerson didn't immediately respond to a
request for comment. The company has previously said it believes
that putting the companies together would create a new powerhouse
in the production of equipment and software used to control
automated manufacturing processes.
The companies have complementary product lines and geographies,
and Emerson believes that combining them would accelerate their
growth. Rockwell's strength is in so-called discrete products used
in areas including auto assembly, packaging and printing, while
Emerson excels in so-called process control for power plants,
oil-and-gas facilities and the like.
Rockwell shares edged 0.7% lower to $191.60 during morning
trading Wednesday, while Emerson shares gained 2.4% to $61.78
Write to Imani Moise at imani.moise@wsj.com
(END) Dow Jones Newswires
November 22, 2017 11:44 ET (16:44 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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