September 15, 2008 / 6:52 AM / 10 years ago

UPDATE 4-Boskalis plans 1.1 bln euro bid for Smit

(Adds Smit rejection, updates shares)

By Gilbert Kreijger and Harro ten Wolde

AMSTERDAM, Sept 15 (Reuters) - Dutch dredging group Boskalis (BOSN.AS) plans an unsolicited 1.1 billion euros ($1.5 billion) all-cash offer for maritime services company Smit Internationale, which promptly rejected the approach.

Royal Boskalis Westminster Group NV said on Monday it planned to offer 62.50 euros per Smit SMTNc.AS share, an acquisition that would turn Boskalis’s small oil and gas terminal business into a world leader. It already is the world’s largest dredging company.

Smit, after the close of the market, rejected the offer, saying it undervalued Smit.

Smit shares closed 28.2 percent higher at 61.79 euros and were the biggest gainer on the Amsterdam stock market, while Boskalis shares fell 6.8 percent to 36.19 euros.

The bid for the entire group comes after Smit rejected a $300 million bid for its terminals division in February from Lamnalco, a joint venture between Boskalis and Saudi group Rezayat.

Lamnalco and Smit’s terminal unit combined would control 40 percent of the global oil and gas terminal services market, with an annual turnover of more than $280 million, Boskalis said at the time.

Boskalis, by contrast, showed revenue from its maritime and terminal services of just 28 million euros in the first half, or 3 percent of the group’s total sales of 938 million euros.

The company’s biggest business unit is dredging; its specially equipped ships suck up sand and rock from the seabed to create harbours and waterways or construct artificial islands and coastal barriers.

NATURAL FIT

Boskalis said it would merge Smit’s salvage, heavy lift and transport activities with its operations, integrate Smit’s terminals services unit with peer Lamnalco, and divest Smit’s harbour towage activities, which make up 19 percent of sales.

It said there was a natural fit between most of its operations and Smit’s activities, while the combination of Smit’s terminals unit with Lamnalco would create significant synergy benefits.

Petercam analyst Paul Linssen expressed concerns that Boskalis could wander too far from its core business.

“We are convinced about the acquisition of the terminal activities, which are already part of the activity portfolio of Boskalis. However, we have some question marks about the fit of the Salvage and Heavy Lift activities,” he said.

Smit made a first-half net profit of 48 million euros on sales of 307 million, and it expects a 2008 profit of between 98 million and 101 million euros. (Editing by Simon Jessop, Paul Bolding)

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