Gemalto has soundly rejected the EUR 4.3 billion takeover bid from Atos, saying it is best positioned to grow successfully and create long term value on a standalone basis. Gemalto said the bid undervalues the company’s past share price averages and its future potential as it successfully transitions from traditional banking and telecom smartcard markets to fast-growing government, enterprise & cybersecurity and machine-to-machine markets. The bid price also doesn’t reflect the potential synergies that would come from a combination with Atos, which Atos itself believes to be substantial. Gemalto CEO Philippe Vallee said that as it nears transition end, the company will be presenting a new “ambitious and substantial” development plan that will focus on the next generation of digital security for companies, governments and citizens worldwide.
Gemalto explained that the proposed price significantly undervalues the company, representing a discount of 27.4 percent against Gemalto’s last 12-month high and premium of only 3.5 percent compared to the company’s 12-month average share price. The board also noted that the bid was made at a time when the company has stabilised its performance following a challenging period.
Gemalto also said the proposal does not give enough deal certainty, given the conditions attached to it and the likely execution risks. In particular, Gemalto said the bid does not contain analysis of the envisaged anti-trust, CFIUS and other clearance procedures and that the merger protocol contains a number of off-market, unclear, unusual and unacceptable terms and conditions. In addition, the way the bid was presented could leave shareholders unprotected and short-changed and in general, showed a possible difference in cultures between the two companies.
