Titan Europe agrees terms for potential offer

WORCESTERSHIRE steel wheel manufacturer Titan Europe has agreed terms with its potential suitor Titan International over the sale of the business.

The board of Titan Europe announced on July 17 that it was in talks with Titan International, which may or may not lead to an offer being made for the whole of the issued and to be issued share capital of Titan Europe.

Now, the board of Titan International – other than Michael Akers who because of his position as chief executive director of Titan Europe has taken no part in any of the talks leading to the announcement – and the independent directors of Titan Europe have agreed the terms of the offer.

This would see existing Titan Europe shareholders receive one new Titan International share for every 11 of their current shares.

The offer values each Titan Europe share at approximately 128.1p per share and Titan Europe’s fully diluted share capital at approximately £112.2m – based on the closing exchange rate of £1: $1.5638) and the closing price of $22.03 per Titan International share on August 9, 2012, the last day of business prior to the announcement.

Titan Europe said the offer represented a premium of approximately 13.3% to the closing price of 113p per Titan Europe Share on July 16, 2012, the last day before an offer was made.

In a statement, the independent directors of Titan Europe, who have been so advised by Arden Partners, said they considered the terms of the offer to be fair and reasonable.
“In providing financial advice to the independent directors of Titan Europe, Arden has taken into account the commercial assessments of the independent directors.
 
Accordingly, the independent directors of Titan Europe unanimously recommend that Titan Europe shareholders accept the offer when it is made,” it said.

Commenting on the offer, Maurice Taylor, chairman and chief executive of Titan International, said: “There is a compelling logic to combining these two great engineering businesses to create a truly global wheel, tire and track industrial group servicing customers across the agricultural, construction, earthmoving and mining industries. Together I believe these two companies can achieve greater growth than on a standalone basis.”

Philip Gartside, the senior independent director of Titan Europe, said: “Up until April 2004 Titan Europe was a part of the Titan International Group and the timing is now right for these two businesses to come back together.

“The cross-selling opportunities both in terms of products and markets are significant and the enlarged Titan International Group will be well placed for growth. The enlarged Titan International Group will have less reliance on the more cyclical construction market, less exposure to weaker European markets and a wider product range.

“It will also have a stronger balance sheet which will make Titan Europe more resilient during periods of uncertainty. The share offer structure gives Titan Europe shareholders the ability to participate in this enlarged Titan International Group going forward.”