Chinese auto supplier to buy Grammer

Bloomberg

Ningbo Jifeng Auto Parts Co. affiliates are in talks to buy out partner Grammer AG in a possible deal that could value the German maker of vehicle seats at about 750 million euros ($872 million). Grammer stock rose the most in nine years.
The German manufacturer received an indicative proposal of 60 euros a share, Amberg-based Grammer said in a statement after Bloomberg News reported on the possible bid. That’s 17 percent more than the stock’s closing price on Monday. The prospective buyer would also pay a 1.25-euro dividend per share.
Jifeng Auto, which according to a representative isn’t directly involved in the deal talks, is already Grammer’s biggest shareholder with about a one-quarter stake.
The German company brought in its Chinese counterpart as an investor in 2017 to fend off stock purchases by the Bosnian billionaire Hastor family, who had been involved in an acrimonious supply dispute with carmaking giant Volkswagen AG.
A takeover has the potential to revive German political concerns about the strategic implications of local takeovers by Chinese buyers.
“At this stage it is uncertain whether the negotiations will be concluded successfully and a takeover offer will be launched,” Grammer said, adding that it’s “assessing strategic options in the best interest of the company.”
The Hastors rank as Grammer’s second-biggest stockholders with a combined 19 percent stake through family investment vehicles, according to data compiled by Bloomberg.
The Jifeng Auto offer might not be enough to win over the Hastors, who would be more likely to seek 70 euros a share, Harald Eggeling, an analyst at Oddo, said.
At the same time, it would allow the family to withdraw from the German company after they lost a battle for control, which “could have a positive operational impact on Grammer as the shareholder structure still seems to be a source of concern for some customers,” Marc-Rene Tonn, an analyst at Warburg, wrote in a report.
Analysts’ median fair value for Grammer has been 53.50 euros a share, according to the German company’s website.
Chinese investments that have prompted scrutiny by Germany’s leadership in recent years include the 2016 purchase of robot maker Kuka AG by Midea Group Co., a planned takeover of semiconductor-equipment maker Aixtron SE that regulators halted that year and the State Grid Corporation of China’s bid for a 20 percent stake in 50Hertz Transmission GmbH.
In the car industry, Chinese billionaire Li Shufu is now the biggest investor in Mercedes-Benz parent Daimler AG with a stake of just under 10 percent.