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Brake systems maker Haldex cautious on 2017 as takeover uncertainty lingers
February 10, 2017 / 11:27 AM / 10 months ago

Brake systems maker Haldex cautious on 2017 as takeover uncertainty lingers

STOCKHOLM (Reuters) - Swedish brake systems maker Haldex (HLDX.ST), under bid from German rival Knorr-Bremse, said on Friday it expected a lower margin and no sales growth this year with weak market demand and effects from the ongoing bidding process seen hitting business.

Two German firms, larger brake systems firm Knorr-Bremse and auto supplier ZF Friedrichshafen, were locked in a bidding war over the Swedish firm last fall, but ZF dropped out eventually after failing to convince enough shareholders to sell.

Knorr-Bremse said on Thursday it was extending the acceptance period in its 5.53 billion crown (497 million pound)(125 SEK/share) bid for Haldex from the end of February until mid-June as it needed more time to get necessary clearances from competition authorities.

“It will be difficult for Haldex to show growth due to the weak market conditions and the drawn-out bidding process,” Haldex Chief Executive Bo Annvik said in a statement.

“Due to lower net sales and high costs related to the bidding process, the operating margin for 2017 is forecast to be slightly lower than in 2016.”

Haldex said its fourth-quarter adjusted operating profit was 48 million crowns ($5.4 million), sharply down from 76 million in the year-ago period, but above analyst forecasts for a 42 million crown profit.

Net sales were flat at 1.05 billion crowns in the quarter, and slightly about the 1.02 billion crowns analyst mean forecast.

The Landskrona-based firm cut its 2016 margin forecast in late December, saying the ongoing takeover situation had negatively impacted business and led to extra costs.

Before ZF dropped out of the bidding war in October, Haldex’ board had recommended its lower 120 crown per share bid over concerns that the Knorr-Bremse offer could run into problems with competition authorities.

Knorr-Bremse said in December it had reached 86 percent of shares in the bid, including the shares it already owned. The bid is conditional on getting it cleared by competition authorities.

Haldex shares were down 0.2 percent at 117.50 crowns by 0919 GMT in very thin trade.

Reporting by Johannes Hellstrom; Editing by Alistair Scrutton

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