Wella Gives Lukewarm Acceptance to P&G Bid

Wella management gave lukewarm support for a “reasonable” takeover offer from Procter & Gamble on Friday, declining to recommend it to investors but saying board members would accept the bid for their own shares, according to a Reuters report.

“The members of the management board intend to accept the tender offer with regard to…shares held by them,” the company said in its first reaction to P&G’s formal offer.

Procter & Gamble, which secured control of Wella in March by agreeing to buy a majority stake from family owners, last week sweetened its bid for outstanding stock in a deal worth $6.42 billion. That, as P&G had hoped, seemed to have been enough to help Wella management overcome some of its initial reservations. “The management board considers the consideration offered by the bidder to be reasonable,” Wella said on Friday, offering its view on the deal as required by German takeover law.

P&G increased its offer for non-voting preference shares by 3.5 euros to 65 euros after Wella management and investors expressed disappointment at an original bid offering a 50% premium for mostly family-held ordinary shares. P&G says it has no intention of further increasing its tender. Wella’s board did not appear to have been completely won-over on Friday. The executive board described the bid as “fair…without, however, expressing a recommendation as to whether shareholders should accept or decline the offer.”

Chief executive Heiner Guertler had “declared his general willingness” to accept an offer to stay on as chairman with, among other duties, global responsibility for the professional hair care business at P&G. Wella’s works council, representing employees with a less certain future, said it “regrets the fact that the price of the preference shares is not higher.” The acceptance period for P&G’s offer to Wella shareholders would most likely expire on May 28, the company said.