August 25, 2017 / 7:21 AM / a month ago

Pegas's board backs R2G takeover bid, dividend may stop

PRAGUE, Aug 25 (Reuters) - The board of Pegas Nonwovens has backed a takeover offer from R2G, the bidder said on Friday, adding it was ready to absorb short-term losses and would limit or halt the dividend.

Investment firm R2G, the second largest shareholder in Pegas with a 10.82 percent stake, said in July its investment vehicle R2G Rohan Czech would bid 1,010 crowns per share, valuing Prague-listed Pegas at 8.9 billion crowns ($403 million).

R2G said on Friday Pegas’s board supported the offer price, calling it “fair”. The artificial textile maker’s shares closed at 1,019 crowns on Thursday.

“(R2G Rohan Czech) is ready to absorb all short-term and mid-term losses and to limit or halt flow of finances to shareholders in order to ... build a stronger, more competitive and more global firm in the long-term,” R2G said.

Analysts from J&T Bank said shareholders were now likely to assume a wait-and-see position.

A representative of Wood&Co, Pegas’s largest shareholder with a 28.8 percent stake, abstained in the board vote.

“It seems R2G and Wood are not acting in concert, there could be a clash between the two now. Some investors might be disappointed there was no premium to existing share price offered,” J&T analyst Bohumil Trampota said.

Pegas shares were down 0.2 percent at 1,017 crowns at 0719 GMT.

$1 = 22.1110 Czech crowns Reporting by Jan Lopatka and Robert Muller; Editing by Mark Potter

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