September 13, 2017 / 8:06 AM / a year ago

UPDATE 1-Wood Textiles reverses course, agrees to sell Pegas Nonwovens stake

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PRAGUE, Sept 13 (Reuters) - Wood Textiles Holding will make way for R2G Rohan Czech’s takeover of Pegas Nonwovens after reversing course and agreeing to sell its 29.98 percent stake in the artificial fabrics maker, the company said on Wednesday.

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 ($408.35 million).

The decision marks a turnaround from July when Wood Textiles said it saw long-term growth potential in Pegas and was not considering offloading its shares to R2G.

“We strongly believe in Pegas and its future success — as we always did,” Petr Vosvrda, director of Wood Textiles Holding Limited said in a statement on Wednesday.

“After further consideration of the voluntary bid terms and consultations with our investors and taking into account their risk and investment preferences, we decided to accept the voluntary bid and exit the company.”

The board of Pegas Nonwovens backed the takeover offer from R2G in August, saying it was ready to absorb short-term losses and would limit or halt the dividend.

J&T Banka said that it had not expected Wood Textiles to accept the offer at that price agreed on Wednesday, adding other shareholders will now likely follow suit.

“Subsequently, R2G could gradually increase its stake so that it can squeeze out minority shareholders and de-list Pegas’ shares,” J&T Banka analysts said.

Pegas runs eight production lines making non-woven fabrics for hygiene products in the Czech Republic. It also has a factory in Egypt and plans to invest in a South African plant. It has customers in Europe, the Middle East and Africa.

R2G, with funds of more than 1 billion euros ($1.20 billion)was started in 2016 by businessman Oldrich Slemr.

The group manages the family money of Eduard Kucera and Pavel Baudis, founders of Czech security software group Avast.

Pegas shares were unchanged around the bid price on Wednesday morning. ($1 = 21.7950 Czech crowns) ($1 = 0.8344 euros) (Reporting by Jason Hovet and Michael Kahn; editing by Jason Neely, editing by Louise Heavens)

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