It did not seem to go wrong. According to many analysts, the American investor KKR’s bid for the bicycle manufacturer Accell (including Batavus, Sparta, Babboe, Koga) was considered reasonable in January last year. Major shareholder Teslin had already said yes to that. And only 80 percent of shareholders would agree to “smoke out” the rest – less than the usual 95 percent.
But just over five months after it became known that KKR wanted to buy the listed Heerenveen company (3,100 employees), it is extremely uncertain whether it will work. The takeover attempt has turned into a vicious battle, where a cleverly intended approach from KKR threatens to backfire. On Thursday, the private equity fund must make clear how it will proceed with the acquisition.
Basically, this means that KKR – also the owner of the holiday park operator Roompot – did not get enough Accell shareholders (turnover in 2021 1.4 billion euros) behind the offer to take the company off the stock exchange. 80 percent of the shareholders were obliged to start a so-called smoke-out procedure: a takeover can still be completed without all shares having been offered to the acquiring party. The other shareholders may then be forced to sell their shares.
But the percentage has remained at 73, as it turned out last week. Several shareholders, including the insurance company ASR (which owns 6 percent), believe that the offer of 58 euros per share is too low. According to them, Accell can expect some growth in the well-functioning bicycle market in the coming years. But perhaps even more important is that there is great dissatisfaction with the way in which the takeover bid has come about.
The takeover bid is in fact the result of a striking action by shareholder and investment fund Teslin from Maarsbergen. The party that owns 10 percent of the documents has itself approached KKR with the question of whether they were interested in taking over Accell. The two agreed that Teslin could remain a shareholder.
A number of shareholders do not like this situation. This leads to inequality between the different parties that own pieces, they believe. “The process is not good in form and content,” the ASR said in a statement. The insurance company is one of the loudest opponents of the takeover along with the French investment fund Monuta (7 percent).
A couple of routes
It is unclear how it will proceed. On Thursday, according to the tender note, KKR will present an update. There are a few routes to follow. In theory, KKR can cancel the takeover completely or accept that it will acquire 73 percent of the shares and let the listing continue. It would be painful and expensive: a lot of money has already been spent on the takeover attempt with the aim of taking control of the entire company.
In addition, Accell itself has something to explain: CEO Ton Anbeek has praised the delisting of the company as an option that is in the company’s interest. KKR would invest more in the long term, while the stock market is more preoccupied with the short term.
In theory, KKR could also increase the bid by agreement with Teslin – although it is still unknown whether it will satisfy the critics of the ‘Teslin trick’. In addition, analyst Martijn Den Drijver from ABN Amro Oddo pointed out in a recent piece about the takeover bid that KKR rarely raises the first offer.
Den Drijver says by telephone that he expects KKR and Teslin to choose to extend the offer period. “It costs the consortium nothing, and thus they keep all options open. Then they check again after two or four weeks where they are. ” There may be investors who initially took action too late, changed their minds, or where something practical went wrong, says Den Drijver.
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At the same time, many shareholders also seem to believe that a takeover will eventually take place. The price of the Accell share fell sharply in recent days after it was revealed that only 73 percent of shareholders had offered their shares. The price is now back around the offer of 58 euros. Nevertheless, not much has changed in the situation, according to Den Drijver. “All options are still open if the offer period is extended, including the scenario that the deal does not go through.”