But in a surprise announcement on Tuesday, Accell said it had decided to pull out of negotiations because it was unhappy with the bid price. "Pon Holding's (increased) indicative offer price constitutes inadequate recognition of the future value Accell Group can create independently," Accell said in a statement. Pon said that "despite an increase in the indicative bid price ... Accell has decided to reject this new proposal and to suddenly break off discussions".
"Pon confirms the withdrawal of Accell's proposition" and confirmed retracting its own "intention to issue a public offer for Accell's ordinary shares," it said from its headquarters in the central Dutch city of Almere. Earlier on Tuesday, Accell, which owns brands such as Diamondback, Lapierre and Raleigh, pulled out of merger talks, saying Pon's offer "does not sufficiently reflect the future value creation of Accell Group and the expected synergies."
"It has also become clear that the offer lacks sufficient support from shareholders," Accell's interim board chairman Hielke Sybesma said in a statement. Initially, Pon Holdings, which owns world-famous bicycle brands such as Derby Cycles, Santa Cruz and Union bicycles, as well as the omnipresent Gazelle bicycle brand in The Netherlands, had offered 32.72 euros ($35.72) per share for Accell.
It subsequently raised the offer to 33 euros per share, excluding a 0.72-euro dividend for 2016, for Accell, which is based in the northern Dutch province of Friesland. The initial offer came to a total of around 845 million euros, according to the Dutch public newscaster NOS. But Sybesma said Tuesday "having studied every important aspect of the offer," Accell "will currently discontinue the talks with Pon Holdings."
Pon, for its part, said it was "surprised" by the Accell's U-turn, "especially given the fact that for more than a month and a half, intensive talks with Accell have taken place, which included the start of the due diligence." Pon said it expects to sell an estimated 800,000 bicycles around the world this year, generating around 700 million euros in revenue. Accell, which owns bicycle factories in China, France, Germany, Hungary, The Netherlands and Turkey, sold 1.5 million bicycles last year and generated more than 1.0 billion euros in turnover.
The Dutch first fell in love with cycling in the 1880s and the country has been one of the world's leading bike makers ever since. Bikes outnumber people in The Netherlands, with an estimated 22.7 million cycles for some 17 million people, according to the latest statistics by Dutch transport federation BOVAG.
Copyright Agence France-Presse, 2017