Talks for a potential takeover of the Accell Group by Pon Holdings, which was intended to form a leading global bicycle group, have at least temporarily come to an end. Accell described the offer as insufficient, despite Pon's move to raise its offer by €1 per share to €33.72 per share for all outstanding shares, valuing the group at about €870 million.
The bid was meant to form a Dutch bicycle group with a joint turnover in the range of €1.7 billion and sales of 2.3 million bicycles. Europe's largest bicycle company, the Accell group comprises brands such as Batavus, Lapierre, Raleigh, Winora and Diamondback. Pon Holdings is the holding company behind a large-scale and family-owned Dutch car import group, which accumulated a raft of bicycle brands from 2011 to form the Pon Bike Group, with brands from Gazelle to Derby, Cervélo, Santa Cruz and more.
Pon was apparently taken aback by Accell's rejection. The prospective buyer said in a statement that Accell decided to “suddenly” break off the discussions, adding that it was withdrawing its offer. Pon admitted that it was “surprised,” particularly given the fact that intensive talks had been held with Accell for more than a month and a half, including the start of due diligence. The improved bid, which included a dividend of €0.72 per share for 2016, represented a premium of 55 percent on the basis of the three and six-month average compared with the closing price on the Amsterdam stock exchange on March 16, the day before the offer was sent to Accell's board.
The initial offer, publicized on April 11, was set at €32.72 per share in cash, again including the 2016 dividend. It offered a premium of 31 percent compared with the Accell share's closing price of March 16, and 23 percent more than the all-time high reached on April 10, the day before the offer was publicized. The initial offer amounted to about 14 times the operating profit reported by the Dutch group for 2016.
Hielke Sybesma, interim chairman of Accell's executive board, said in a statement that the group's supervisory and executive board had studied all important aspects of the offer and come to the conclusion that it didn't sufficiently reflect Accell's potential value creation and expected synergies. It has become clear that the offer lacks sufficient support from shareholders, added Sybesma, who became interim chairman in April after the departure of the group's long-time chief executive, René Takens.
Accell's evaluation of the Pon bid was based on Accell's estimated potential with the implementation of its “refined strategy” in a standalone scenario. This strategy revolves around bicycles as a valuable product and service for e-mobility and recreation. It further includes a stronger focus on consumers and investments in omni-channel retailing.
When the offer became public, Pon said that there was an outstanding strategic fit between the bike activities of Pon and Accell, adding that the two groups together would have sufficient scale to be a long-term winner in the industry.
