22 nov.: Sogeti, leader du Testing en France
22/11/2012 03:58:00

UPDATE: Special CNH Global Committee Favors Latest Fiat Offer

Related content

--CNH committe tells advisors to negotiate final deal with Fiat

--Fiat's dividend offer attracts favorable response from panel

--Fiat Industrial already owns about 88% of CNH's stock

(Updates with more details. Comment from analyst.)

By Bob Tita

A committee of directors for CNH Global N.V. (CNH) on Wednesday reacted favorably to Fiat Industrial SpA's (FI.MI, FNDSF) sweetened offer to buy out CNH's minority shareholders and instructed the committee's advisors to begin final negotiations on a deal with the Italian company.

Fiat Industrial this week added a $288 million cash dividend, or $10 per share, to its original offer of 3.828 shares of stock in a new company for each CNH share. The committee for the U.S. farm and construction equipment manufacturer said in a written statement late Wednesday that it "views favorably" Fiat's latest offer and directed its advisors to negotiate a "definitive" agreement with Fiat based on the terms of the new offer.

Fiat Industrial already owns about 88% of CNH's stock. It wants to acquire the 12% stake it doesn't own and relaunch Fiat Industrial as a new company with stock listings in New York and Europe. Fiat expects the merger would simplify its ownership structure, attract more investors and give the new company greater access to credit markets.

CNH is the world's second-largest seller of farm machinery behind Deere & Co. (DE) and owns New Holland, Case and Kobelco brands of farm and construction equipment. In addition to CNH, Fiat Industrial also owns the Iveco commercial trucks, which would be folded into the new company.

Fiat Industrial company gave the CNH committee until a minute before midnight on Wednesday to reply to its revised offer. The company hopes to reach a final agreement by Sunday.

CNH Wednesday closed down 0.08% at $47.50 a share. Based on CNH's share price and the $10 dividend, the deal would be worth about $1.7 billion.

"This merger is somewhat of the coup for Fiat, but it's also a natural fit too," said Lawrence De Maria, an analyst for William Blair & Co.

Mr. De Maria said CNH and Iveco would be able to lower their costs by more effectively sharing engines and powertrain components, technology and production facilities under one company. For Fiat, the new company is likely to become a more valuable asset than the current CNH. CNH has often traded at a discount to its machinery sector peers because of its opaque corporate structure and limited market liquidity as a public subsidiary under the Fiat Industrial holding company.

The CNH committee on Oct. 15 rejected Fiat Industrial's original offer of a stock swap, calling the proposal inadequate and not in the best interest of either CNH or its shareholders. Fiat Chairman Sergio Marchionne later indicated that Fiat was willing to consider an improved offer for CNH's minority shares.

The committee's statement said the "enhanced terms of the offer resulted from a robust and constructive exchange with Fiat Industrial."

Despite Fiat's overwhelming stake in CNH, Fiat cannot unilaterally impose terms to acquire the 12% stake. Under securities law in the Netherlands, where CNH is registered, a majority shareholder would have to own at least 95% of a company's stock to squeeze out minority shareholders.

--Write to Bob Tita at robert.tita@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

November 21, 2012 21:58 ET (02:58 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

22 nov.: Sogeti, leader du Testing en France

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