5/19/2010 1:41 PM ET
(RTTNews) - Defense contractor Honeywell International Inc. (HON: News ), Wednesday said it intends to make an approximately $1.4 billion offer to buy French personal protection equipment maker Sperian Protection (SPR.PA). The offer will be filed to the French "Autorites des Marches Financiers" at the latest before the opening of the market on Friday, May 21, 2010. Shares of Sperian is currently up more than 12% on the Paris Bourse.
The transaction is expected to be dilutive to Honeywell by $0.04per share in 2010 and expected to be accretive in 2011. Honeywell indicated no change to its 2010 earnings guidance.
The opening of the offer is subject to approval of the French "Ministere de l'Economie, de l'Industrie et de l'Emploi" on foreign investments and final recommendation of Sperian's Board of Directors upon receipt of a fairness opinion.
Honeywell will make an Euro 117 per share all-cash tender offer for Sperian Protection shares, indicative of a 93% premium on the spot price as of March 30th, the last unaffected share price before an offer by private equity firm Cinven. The offer also represents a 67% premium over the price previously offered by Cinven.
On March 31, Cinven said its subsidiary Menelas France SA made an Euro 70 per share friendly public tender offer for Sperian shares, which represented a 16% premium on the closing price of the share as of March 30, 2010. The board of directors of Sperian had also granted Cinven an exclusivity period up to April 30, 2010.
The completion of Honeywell's offer would be subject to the successful tender of shares by Sperian shareholders representing no less than 57% of the diluted number of shares, which includes Essilor 15.0% and Dalloz stake of 13.2%, as well as EU and U.S. anti-trust clearance.
The acquisition will be made through a binding sale agreement with Essilor and Ginette Dalloz, with the launch of an all-cash tender offer for all outstanding shares of Sperian Protection.
The tender offer has been unanimously approved by Sperian Protection's board and currently intends to recommend the offer upon receipt of a fairness opinion. Pending regulatory approvals, Honeywell expects the transaction to close in the third quarter of 2010.
Commenting on the deal, Henri-Dominique Petit, Chairman of the Board of Directors of Sperian Protection said, "I'm pleased about the outcome of this process and believe with the board that the transaction is in the best interests of Sperian, its employees, customers and shareholders, subject to conclusion of fairness opinion from an independent expert."
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