FRANKFURT (Reuters) - Morgan Stanley Infrastructure announced a cash takeover offer for rail logistics group VTG VT9G.DE on Monday after securing a large stake from German billionaire Klaus Michael Kuehne.
The U.S. investor is offering 53 euros for every share it does not already own, valuing the German firm at around 1.52 billion euros ($1.78 billion).
VTG stock, listed on Germany’s small cap index .SDAXI, spiked 14 percent to 55 euros, indicating that some investors are hoping for a higher offer.
Kuehne Holding AG agreed to sell around 20 percent of VTG for more than 300 million euros, raising Morgan Stanley Infrastructure’s stake in the company to 49 percent.
“We have friendly intentions and believe that due to our infrastructure expertise we are an excellent partner to drive VTG’s growth,” Markus Hottenrott, chief investment officer at Morgan Stanley Infrastructure Partners, told Reuters.
He added that the fund holds its investments for an average of seven years and that a potential domination agreement - requiring 75 percent of the shares - or a delisting of VTG are not crucial to Morgan Stanley’s plans for the company.
Kuehne had bought his stake for less than 30 euros a piece from U.S. investor Wilbur Ross, who had acquired the company from TUI (TUIGn.DE) in 2005 and floated it in 2007.
VTG’s third-largest investor, the Joachim-Herz foundation behind consumer goods firm Beiersdorf (BEIG.DE), said it has not yet decided whether to tender its shares.
Ahead of the deal, VTG will need to close the 780 million euro acquisition of French peer Nacco, which will be financed in part by a planned 300 million euro capital increase.
Separately, a solution needs to be found for VTG’s small Russia business as Morgan Stanley wants to avoid any of its companies doing business with Russian counterparts targeted by U.S. sanctions.
VTG last year posted earnings before interest, tax, depreciation and amortization of 343 million euros on sales of 1 billion euros. It has 80,000 rail freight cars which it leases to companies active in the chemicals, oil and agriculture sectors.
Reporting by Alexander Hübner and Tom Sims; Writing by Arno Schuetze; Editing by Adrian Croft