Hagemeyer: Sonepar's Bid Is Too Low

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October 9, 2007

Hagemeyer: Sonepar's Bid Is Too Low

Hagemeyer NV said in a press release Tuesday that Sonepar's unsolicited bid of US$3.5 billion (2.5 billion euro) "significantly undervalues the company." Hagemeyer says it will meet with Sonepar to "clarify its intentions."

Paris-based Sonepar announced in an unsolicited offer that it would pay 4.25 euro in cash per share for the Netherlands-based distributor. The global electrical distributor notified Hagemeyer of its intention on Monday, Oct. 8.

The joining of Sonepar and Hagemeyer would create a global electrical distribution giant with global revenues of roughly 15.5 billion euro (US$22 billion), based on the two companies' reported sales in 2006. In North America, Hagemeyer did close to $2 billion in sales in 2006. The Sonepar USA division is reported to have had $2.4 billion in sales in 2006. That number should grow significantly this year, as Sonepar has picked up its acquisition pace through 2007.

More than 90% of Hagemeyer's total revenue is generated by its core Professional Products and Services business, which is focused on the distribution of electrical parts and supplies, safety and other MRO products in 25 countries across Europe, North America and Asia-Pacific.

Sonepar Group is an electrical distributor based in France with 9.45 billion euro (about US$13.3 billion) in sales in 2006. The company operates in 29 countries on four continents. It is a family-owned group that has grown through acquisition since 1982 when it bought its Dutch peer Otra NV.

Rexel, which was the target of speculation in recent weeks that it would be the first bidder on Hagemeyer, said in a release it is reviewing its strategic options and will keep the market informed of its decisions.

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