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19 Oct 2006

Hedge Funds Involved in Scania/MAN Takeover

The Frankfurter Allgemeine Sonntagszeitung reported that several large hedge funds are buying shares in MAN AG and Scania. Not saying who these hedge funds are, the Frankfurter reports they may now have over 15% of Scania shares. The newspaper also said that hedge funds own a significantly smaller amount of MAN’s shares, without giving a specific percentage.

These numbers may play a role in the decisions made with the 18.7 pct stake in Scania owned by that Volkswagen AG, which is comparable to the hedge fund shares. VW said it would only offer that holding to MAN if the latter’s bid draws commitments from holders of at least 71.3% of Scania’s shares.

Truck maker Scania AB, however is fighting the $12.9 billion bid from rival MAN AG, saying they would pay extra dividend on their shares this year. This special dividend, worth a total of $949 million, makes it more attractive for shareholders to hold on to Scania shares and may force MAN to increase its bid for a second time, analysts say.

Volkswagen, the largest shareholder of both MAN and Scania, wants the two companies to treat the deal as a merger rather than a takeover, asking MAN and Scania to negotiate following MAN’s $10.3bn hostile bid for Scania.

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