FRANKFURT (Reuters) – Finland’s Kone (KNEBV.HE) has hired German law firm Hengeler Mueller to advise it on a planned takeover bid for Thyssenkrupp’s (TKAG.DE) elevator division, two people familiar with the matter said.FILE PHOTO: A logo of Thyssenkrupp AG is pictured at the company’s headquarters in Essen, Germany, November 21, 2018. REUTERS/Thilo Schmuelgen
The move underscores Kone’s strategic interest in the business, which analysts say could be worth as much as 17 billion euros ($19 billion) and which Thyssenkrupp has put up for sale as part of a broader restructuring.
Kone and Hengeler Mueller both declined to comment.
One of Germany’s top corporate law firms, Hengeler Mueller helped advise Tata Steel (TISC.NS) on a planned joint venture with Thyssenkrupp, a deal that ultimately collapsed due to antitrust concerns.
Shares in Thyssenkrupp, which are due to leave Germany’s benchmark DAX index .GDAXI later this month, turned positive following the news and were as much as 1.3% after falling 3.9% earlier. Kone shares were down 1.8%.
Thyssenkrupp Chief Executive Guido Kerkhoff will likely inform his company’s supervisory board about initial expressions of interest for Elevator Technology (ET) during a meeting on Wednesday, several people familiar with the matter said.
Thyssenkrupp asked for initial offers last week as plans for a partial listing of the unit seems increasingly unlikely. It is being advised by , which sources say is advised by Goldman Sachs (GS.N), JP Morgan (JPM.N), Deutsch Bank (DBKGn.DE) and Linklaters, separate sources said.
Kone, which also draws on the support of Bank of America (BAC.N) is seen as the most likely strategic bidder after its CEO Henrik Ehrnrooth made public his interest in ET, calling it a “perfect fit” in a newspaper interview.
Raising its target price to 12.60 euros per share from 11.50 euros, Independent Research said strategic bidders, including Kone, were likely to ask for a majority stake in ET, unlike private equity firms who were also in the running.
Danske Bank has said that Kone could pay as much as 21.8 billion euros for the asset, adding a higher price would not make as much financial sense for the Finnish group as it would represent the full value of ET plus the value of expected synergies, or cost savings.