FRANKFURT (Reuters) - U.S. ATM maker Diebold Inc (DBD.N) is not considering raising its $1.8 billion offer for German rival Wincor Nixdorf WING.DE and will not lower the acceptance threshold, its chief executive told Reuters in an interview.
Wincor Nixdorf shareholders have until March 22 to accept Diebold’s cash and share offer and it remains unclear whether the U.S. company will reach the required total of 75 percent support.
At the end of last week, just 1.64 percent of Wincor shares had been tendered, although the bulk of investors traditionally wait until closer to the deadline.
The deal would be the first takeover of a German company by a foreign company without the buyer having secured the help of an anchor shareholder, said Diebold Chief Executive Andy Mattes.
Mattes said he remained optimistic, based on responses received in the past weeks during a road show.
Asked whether Diebold could lower the threshold, Mattes said: “That is a clear ‘no’,” adding the deal would fall apart if the threshold were not reached.
“We finalised our package to finance the deal at the end of last year. This package is linked to the price and to the acceptance rate,” he added.
“As you know, the credit market has changed dramatically since the end of last year. This means that if we were to change one of the conditions, we would need to restructure the financing and that would be very detrimental economically.”
A combination of Wincor Nixdorf and Diebold would be the global market leader in ATMs, with a market share of about 35 percent, leaving NCR (NCR.N) the global number two with an estimated share of 25 percent.
But analysts have expressed doubts as both Diebold and Wincor have had a hard time adapting to rapid changes in the sector from the rise in online banking and ecommerce, which have crimped capital investment by banks eager to keep costs in check while still battling the lingering effects of the financial crisis.
All players in the sector have recently been competing to offer more banking software and services, including security and payments services, as the ATM hardware business is challenged by customers using less and less cash.
Diebold has said it expects to reap $160 million in synergies from the deal.
“These are clear cost synergies”, Mattes said, adding that Diebold was very conservative in calculating such benefits, the biggest part of which he expects to be realized in the second year after the closing of the deal.
“In addition to the cost synergies, we see significant synergy potential on the revenue side.”
Editing by Georgina Prodhan and Keith Weir